Devils Co-Owner Looking To Relinquish Stake As Part of Debt Refinancing
Devils co-Owner Ray Chambers is "seeking to relinquish his stake in the NHL team as part of an exit strategy aimed to help the financially struggling franchise refinance its debt," according to sources cited by Considine & Horowitz of the Newark STAR-LEDGER. A source said that holding company Brick City LLC, operated by Chambers' son-in-law and Devils co-Owner Michael Gilfillan, has "agreed to pay off a $23 million loan to a lender as part of an arrangement that would allow Chambers, a billionaire philanthropist, to give up his 47 percent share in the team." The source also said that the Devils' other main co-Owner, Jeffrey Vanderbeek, "still owes $23 million from the joint loan that paid for team operations." If approved by the NHL BOG, the deal "would give Vanderbeek a 94 percent controlling interest in the Devils at what may be perceived as a low price." Minority Owner Peter Simon "would continue to own the remaining 6 percent of the team." The deal will also allow Vanderbeek "to pursue financing without Chambers." Sources said that it is "possible a deal with lenders could be in place in one month, with Chambers' departure from the organization" (Newark STAR-LEDGER, 9/26). In N.Y., Josh Kosman noted the deal as structured indicates Chambers, who has been "looking to exit the mostly money-losing franchise for about a year, appears to feel the equity in the NHL team is worthless." The sale of Chambers' stake in Devils Arena Entertainment "also includes his piece of the company that operates the Prudential Center." DAE has "debt of roughly $180 million," and Kosman noted, "Presumably, Chambers' view is the team and arena operations are worth less than that amount." Sources indicated that the co-Owners "need approval from the Devils lending group, and the NHL, to close the deal, which is no sure thing" (N.Y. POST, 9/24).