The Bankruptcy Court of the Northern District of Texas in Dallas put the final nail into the coffin of the San Angelo Colts. In a ruling Friday, the court ordered the San Angelo Colts Baseball Club, LLC. Chapter 11 proceedings be dismissed. The next step is liquidation of its assets under the guidance of the court.
The court had been grappling with shepherding the Colts through a reorganization, or Chapter 11 bankruptcy, for almost a year. However, the Colts organization, such that still existed, was unresponsive to the court’s requirements, even to the point of completely ignoring the court’s requests for documentation, or reports, on accomplished tasks in the Chapter 11 proceedings.
Texas Attorney General Ken Paxton involved his office on behalf of Angelo State University who owns the land underneath the Colts’ stadium. The university had been attempting to negotiate a lease with the partnership on the property to no success.
ASU was asking for $4,166 monthly lease payments. The Colts went silent.
Chris Murphy, Assistant Attorney General or Texas, in the Bankruptcy Regulatory Section for the TAG, sent a final demand letter April 24. He demanded that the Colts enter a new stadium use agreement with ASU by May 4 or the Colts were in default.
There was no answer.
David Boyle petitioned the court in February requesting that the Chapter 11 be denied. In the court filing, Boyle claimed to be a minority partner (less than one percent) a well as a creditor. His described the condition of the Colts at the end of 2014.
“There does not appear to be sufficient funds to pay attorney’s fees, employees nor pay unpaid employees, such as General Manager Herman ‘Doc’ Edwards, who is owed $32,200, pre-petition and post-petition. Mr. Edwards, a former major leaguer, has been Field Manager for nine years and wishes to return for a 10th year if the Colts are able to successfully reorganize with a viable operation. He [Doc] is motivated solely for the love of the game and to provide a place for regional athletes to play ball,” Boyle’s petition reads, as submitted by his attorney Dana A. Ehrlich.
Boyle was claiming $56,964.12 as a secured claim against future revenue, and from a personal guarantee of the league owner (and team’s majority owner) John Bryant of Dallas. Bryant was the majority owner of San Angelo Sports Equities, LLC, and Reunion Sports Group, LLC that operated the Colts and the Colt’s league, the United Baseball League respectfully.
Boyle also claimed that the team had not filed their IRS taxes nor were they making appropriate provisions to pay federal employment, Medicare, and Social Security taxes.
Boyle described the decline of operations of the Colts over three years. “In 2012, the Colts were still averaging 2,143 fans per game, but attendance fell to 1,083 fans per game in 2013 and plummeted even further last [year]--fewer than 440 fans per game in 2014,” his petition states.
The 2014 season abruptly ended with eight games left on the schedule in August because, Boyle claims, there was no operating capital.
Motown, Inc. filed a petition on behalf of 1st Community Federal Credit Union to deny the Chapter 11 proceedings or convert to liquidation, or Chapter 7. Motown reported that 1st Community FCU held $356,093.00 and $27,225.13 in notes to the team, with the stadium as collateral. The stadium, they claimed, cost more than $2 million to build. Motown said there were 104 creditors to the team.
Among the creditors who had claims against the Colts, according to the bankruptcy court:
- Bes-Tex
- Comptroller of Public Accounts (State of Texas)
- David Boyle
- Howard “Doc” Edwards
- Jane Gray
- Power Systems Computers
- Steak Express
- Texas Workforce Commission
- Verizon Southwest
- Eric A. Liepins (The attorney for the Colts’ bankruptcy)
- Tom Green County Appraisal District
- Angelo State University
- City of San Angelo Water Dept.
- Cromwell Cap
- Dot the I’s (Dublin, Ohio)
- Heath Brown
- Internal Revenue Service
- Lone Star Contracting
- Red Ball Taxi and Shuttle
- West Texas Fire and Industrial
- 1st Community Federal Credit Union
- Gandy Ink
- House of Chemicals
- Inn of the Conchos
- TXU Energy Retail Company, LLC.
On Friday, the federal bankruptcy judge ordered that the Colt’s Chapter 11 case be dismissed, per the request from ASU made through the Texas Attorney General’s office.
What will become of the Colt’s assets? The only significant asset is the structure of the stadium. What is known is that the former Colt’s organization no longer has a say in bankruptcy court about how its assets are liquidated.
The creditors are now free to pursue the Colt’s assets.
Subscribe to the LIVE! Daily
Required
Post a comment to this article here: