The meeting, required by Section 341 of the bankruptcy law, will be the first opportunity that creditors of the CBA-version of the Grand Rapids Hoops will have to meet with a representative of the trust.
“Some of the local creditors may have gotten notice of the meeting. But some may have not gotten notice yet because the debtor has not filed its complete set of bankruptcy schedules yet and a full list of all of the creditors,” said John Porter, a Belmont-based attorney appointed by the court to oversee the bankruptcy process.
The meeting is not only for local firms that did business with the Hoops, but for all vendors who may be owed money by all the CBA franchises.
Isiah Thomas bought the minor pro league in 1999, then put the CBA in a trust the following year when he became head coach of the Indiana Pacers. Thomas suspended league operations in February and then filed for bankruptcy protection. Local attorney Harold Nelson is representing the trust.
“We are now taking direction from them as it relates to the assets we are still holding on to,” said Rich MacKeigan, general manager of the Van Andel Arena. “I think what they are doing right now is assessing and finding out how many creditors they have … and, conversely, they’re also trying to find out what assets they have.”
MacKeigan said the trust informed him that the furnishings and computers being held by the arena are considered assets.
“It appears that the demands of the creditors greatly outnumber the value of the assets,” said MacKeigan. “So it appears that many creditors will be looking at a settlement on the dollar, if anything.”
Geoffrey Fields, a partner at Dickinson Wright and representing the Convention and Arena Authority (CAA) in the matter, told the Business Journal it hasn’t been determined how much the CBA owes the board. The CAA owns and operates the arena, where the Hoops played for four-plus seasons.
“We’re still working on it,” said Fields last week.
The meeting will be held Friday in Room 215 of the Eberhard Center on the downtown campus of Grand Valley State University. Porter said the hearing would start at 9 a.m., but that it wouldn’t run longer than two hours. He added that it wasn’t mandatory that creditors attend.
“The (Section) 341 meeting does not adversely or positively affect anybody’s rights. Nobody is jeopardized if they don’t appear. Nobody’s rights are jeopardized if they didn’t know about the meeting,” said Porter.
“Creditors may ask questions at a meeting like this. But the questions will be limited to factual issues,” he added. “In this particular case, I’m not going to allow questions relating to historical situations, or questions such as why did the business go under.”
Creditors will learn how to file a claim at the hearing.
“What I will probably do at the 341 meeting is make some preliminary remarks at some length about the status of the case at this particular time: what I have done, what I am continuing to do, what I am trying to accomplish and have been trying to accomplish since my appointment,” said Porter. “And I will also try to answer questions people might have concerning how to file claims.”
Delta Properties President Joel Langlois said he purchased some of the Hoops’ assets last month and then moved the franchise to the International Basketball League and to the DeltaPlex in Walker, a building he owns.
As for the Hoops’ lease at the arena, which had 16 home dates remaining this season, MacKeigan said he didn’t think the trust would list those dates as an asset. If the trust did so and then tried to sell the dates, whoever bought the lease would then be legally responsible for the debt the lease carries.
The franchise was in the final year of its five-year lease when Thomas shut down the league. The Hoops paid the arena about $7,000 for each home game.