Deal to buy Lightning dead
By DAMIAN CRISTODERO
Times Staff Writer
The $200-million deal Absolute Hockey Enterprises was hoping to put together to buy the Lightning from Palace Sports & Entertainment is dead.
Palace Sports terminated the purchase agreement on Nov. 14, when Absolute Hockey did not come up with a scheduled $5-million payment. Now the investment group has splintered as the companies and partnerships owned by Coral Springs real estate developer Jeff Sherrin and former Blue Jackets president Doug MacLean are suing Hollywood producer Oren Koules for allegedly failing to make a capital contribution of $4.17-million which was to be part of the $5-million payment due Nov. 12. It also claims Koules went behind Sherrin's and MacLean's backs to make his own arrangements with Palace Sports.
The lawsuit seeks $50-million in damages. Filed in the 13th judicial circuit in Hillsborough County, it is peppered with words such as "fraud'' and "unfair and deceptive trade practices'' and "civil conspiracy.''
The other known members of the investment group are Mark Burg, Koules’ business partner, and Tampa attorney Steve Burton.
"I heard what's going on,'' Burton said. "I hope they can work it out.''
While the deal as originally announced with much fanfare in a news conference on Aug. 7 at the St. Pete Times Forum is no longer valid, don’t be surprised if a deal is resurrected at a later date with Koules or a group led by him.
Koules has a minor league hockey background and always expressed his interest most fervently. He said shortly after the sale was announced that he already had depth charts on his desk in Los Angeles. And Tom Scarritt, the Tampa attorney for Sherrin and MacLean, said he believes Koules is still in "conversations'' with Palace Sports.
But no deal will happen quickly. The justice system is slow enough. Now, an entirely new deal may have to be developed. According to Scarritt, Koules was responsible for providing $50-million cash of the $60-million the group had accumulated and had seen his projected onwership stake rise from 30 to 70 percent. He also was to be the point man to secure the loans to to complete the purchase.
Additionally, Palace Sports was going to give Absolute Hockey $30-million in "seller financing.'' to help get the deal done. In the letter from John O'Reilly, Palace Sports' chief financial officer, to Absolute Hockey that squashed the deal, O'Reilly wrote of his company's "unprecedented cooperation and assistance to the Purchasers.''
Said Palace Sports in a prepared statement: "While there is no current agreement in place to sell the team, PS&E is hopeful that those differences can still be resolved and a successful ownership transfer can take place. As it has since purchasing the team in 1999, PS&E will remain 100 percent committed to the best interest of the Lightning, it's fans and the entire Tampa Bay community, while continuing to operate the team and the St. Pete Times Forum in a first-class manner.''
The NHL, through spokesman Frank Brown, declined comment.
Who knows what will happen to the other partners?
Burg, who has said he recently doubled his stake in Absolte Hockey, also has said he was in it only because of Koules. Burton is a minority investor.
The bombshell is another twist in a process that has been anything but smooth. At the news conference announcing the original sale of the team, the St. Pete Times Forum lease and 5½ acres of adjacent land, the group said it would announce the rest of the investment group soon after.
But names were difficult to come by, and while Berg and Burton were brought on board (and revealed only after pressure from the Times), MacLean always maintained at least one other investor had yet to be named.
Absolute Hockey said repeatedly it hoped to close the deal by the end of November. There also was a Dec. 31 deadline in the purchase agreement to finalize the transaction.
It was not going to be an easy process in any situation.
Before the sale could close, the NHL's Board of Governors had to approve the transfer of ownership. If done at a Board of Governors meeting, 23 of the 30 teams would have to sign off. If it was done between meetings, by fax, 30 of 30 needed to agree; the unanimous vote because when not in the same room, governors cannot make arguments for or against.
But when the deal did not make it onto the agenda of Board of Governor’s meeting Wednesday and Thursday in Pebble Beach, Calif., it was obvious the deal was not progressing as quickly as hoped.
Staff writers James Thorner and Jonathan Milton contributed to this report.