His Boots Are Headed For Prison

((HT: GlobeSports))

A federal judge on Tuesday sentenced Silicon Valley financier William “Boots” Del Biaggio III ((pictured, thanks Nashville Post)) to more than eight years in prison for bilking investors and banks — including one he helped launch — out of millions of dollars in a desperate attempt to buy a pro hockey team.

Boots is to report to prison in January.

Del Biaggio pleaded guilty to one charge of forging financial documents to obtain $110 million in loans from several banks and two NHL owners — Craig Leopold of the Minnesota Wild and Los Angeles Kings owner AEG. Del Biaggio used the money to purchase a controlling interest in the Nashville Predators.

Del Biaggio set his crime in motion by turning to David Cacchione, a financially strapped stockbroker at Merriman Curhan Ford Group Inc. who owed him $2 million. According to federal prosecutors and the SEC, Cacchione e-mailed Del Biaggio account statements from several wealthy Merriman clients showing tens of millions of dollars worth of stock holdings.

Del Biaggio then doctored the account statements by cutting out the clients' names and pasting in his own and presenting them to the banks and NHL owners as collateral. Auditors examining Merriman's books uncovered the fraud last year. Cacchione has pleaded guilty to one fraud charge and is scheduled to be sentenced Sept. 29.

Henry Tang, Merriman's chief financial officer, on Tuesday told U.S. District Court Judge Charles Breyer that the scam cost the San Francisco-based company $10 million in legal fees and forced it reduce its staff from 188 employees to 85. Tang said the publicly traded company's share price has tumbled because of Del Biaggio's action, wiping out $43.4 million in market capitalization.

Breyer ordered Del Biaggio to pay back eight banks and the two NHL owners a combined $47.5 million. One of the victim banks is Heritage Bank of Commerce, which Del Biaggio co-founded with his father nearly 20 years ago. The judge ordered Del Biaggio to pay the bank $4.8 million.

Besides the fraudulent loans, the Securities and Exchange Commission has filed a lawsuit seeking to recover roughly $20 million of individual investments the agency accuses Del Biaggio of spending on personal expenses. Three of those investors on Tuesday urged the judge to mete out a lengthy prison sentence, complaining that Del Biaggio squandered their retirement funds and children's education nest eggs.

Several other victims, including childhood friends and longtime business associates, wrote the court with similar sentiments. Although those losses weren't included in the indictment, Breyer still ordered Del Biaggio to also pay back those victims. In all, Del Biaggio has to repay a total of $67.4 million.

“A betrayal of trust is an awful thing,” Breyer said. “I don't care if you can pay back everything — this will never leave you and that's the real punishment here.”

Breyer said Del Biaggio's cooperation with investigators once his fraud was discovered spared him a longer prison sentence of more than 10 years.

He filed for bankruptcy and many of his assets, including his Nashville Predators stake, will be sold by court order.

On Tuesday, while his weeping parents and friends looked on, Del Biaggio tearfully apologized and vowed to pay back everyone.

“I was blinded by pride and ego,” he said. “Everyone makes mistakes. I will come back from this and I refuse to let this define my life.”

Those of us at OSG HQ would like to remind people that the NHL let this happen as well- by not performing due diligence necessary to make sure someone like Del Biaggio couldn't be an owner...

And that Jim Balsillie could...

Risebrough Out As Wild GM

((HT: MyfoxTwinCities))

Less than a week removed from head coach Jacques Lemaire stepping down, the Minnesota Wild announced today that President and General Manager Doug Risebrough will not return next season.

Team owner, Craig Leipold, announced today that the organization will not renew Risebrough’s contract.

“The entire Minnesota Wild organization is forever indebted to Doug for his substantial efforts in establishing this franchise’s solid foundation and winning tradition,” said Leipold in a media release. “The positive impact of Doug’s service will be felt for many years to come. We wish Doug the very best.”

The move marks a continued move towards a new direction for the team which will have a new head coach, and also faces the reality of losing star forward Marian Gaborik.

Team Assistant General Manager Tom Lynn, will act as General Manager until a replacement is found.

Your Daily Jim Balsillie Update

According to an article from the Globe and Mail's David Shoalts and Sean Gordon, wanna-be National Hockey League/Nashville Predators ((pictured, thanks thetennessean.com)) -minority/majority owner Jim Balsillie has some competition for the 27-percent stake of the franchise currently up for bankruptcy bidding from the portfolio of William "Boots" Del Biaggio...

The rest of the current ownership group...

Minority owner Herb Fritch and two other sources told Shoalts and Gordon that the group headed by David Freeman has put in a number of their own to the bankruptcy court in San Francisco.

The article goes on to say that the 27-percent stake is valued at US$20-million, but the courts view it to be slightly higher in their own assessment. Fritch admitted that the ownership group's bid was at an undervalued rate to the assessed value.

Don't be surprised, though, if Balsillie bid over either value since he was willing to part with almost US$240-million to pick up the Preds in the first place. The current ownership consortium ((that's a fancy name for "group")) ended up grabbing the team from ex-owner Craig Leipold for US$176-million.

But another rub in all of this is the approval of the new owner by both the rest of the group and the National Hockey League when the bankruptcy court decides on a final winner in the case.

Ahem... quote... from the article...

"I believe our group has to approve any sale of those shares, so we have some control over who gets them... I don't care what the amount [of the bid] is, it's got to be approved by the powers that be," Fritch said. "I think the bankruptcy trustee has to take that into account."

Stephen Brunt follows up the work from these two with a column of his own... feeling that the current US economic downturn may lead to Balsillie's riding a white horse and bringing a second NHL team to southern Ontario province after all...

Strangely enough... the local paper in Nashville hasn't touched this yet...
As of the time of the story developing, anyway...
When we know more... you'll know more...

UPDATE: Sources tell Sportsnet's HockeyCentral that the Predators, on the whole, are not for sale and that Balsillie's interest is dependent on the 27-percent Del Biaggio portion of the ownership stake. Apparently, even with the Del Biaggio percentage being less than a majority, the National Hockey League Board of Governors would still have to approve the transfer.

NHL Looking Into AEG

What would happen if you owned more than one franchise at once...?

That scenario almost happened when Anschutz Entertainment Group ((AEG)) dropped a $7-million loan, and Craig Leipold sent $10-million into the pockets of "Boots" Del Biaggio to make sure his Forecheck Holdings could pick up 31-percent of the Nashville Predators when Leipold wanted to leave and buy the Minnesota Wild.

Got all that...?

Had this all gone down AEG would have had pieces of the LA Kings and the Preds. Leipold would have had pieces of the Wild and the Preds. Del Biaggio admitted, in his prospectus for possible Forecheck investors, that he thought after two seasons there would be enough of a loss to move the team from Nashville. He also admitted Kansas City had shown interest in gaining a tenant for its Sprint Center ((pictured- Isn't it pretty??)). "Boots" also admitted NHL Commissioner Gary Bettman didn't perform standard due diligence research on his finances to a California business associate Doug Bergeron. Bettman disputes Bergeron's version of events.

By the way, guess who owns the Sprint Center...?
Yup... AEG...

Larry Brooks work in New York City at the Post going over all this is hyah
Current Wild, and possible current-partial owner of the Preds, Craig Leipold is now "disappointed" in learning Del Biaggio is chasing bankruptcy protection in the St. Paul Pioneer-Press;

"Mr. Leipold is disappointed to learn of these developments regarding Mr. Del Biaggio. Mr. Leipold has been pursuing his legal remedies, and he will continue to assert his claims against Mr. Del Biaggio in accordance with the applicable bankruptcy court procedures.

"In deference to the judicial process, Mr. Leipold prefers not to comment on the pending litigation against Mr. Del Biaggio at this time."

Leipold failed to address the idea of loaning Del Biaggio the money...
Shocking...

Preds Sale Hinged On Leipold Loan

The Tennessean's Brad Schrade is at it again...

He has come across the confidential agreement that got old owner Craig Leipold ((pictured, thanks thetennessean.com/George Walker IV)) out of owning the NHL's Nashville Predators and got the local consortium in as the owners.

There's one problem... Leipold and AEG, the parent company of the Los Angeles Kings, loaned "Boots" Del Biaggio 17 of the 30-million dollars that he pitched in to be part of the new sandbox.
Del Biaggio and his Forecheck Holdings outfit was in possession of 31-percent of the franchise until it was disclosed that Del Biaggio had apparently falsified financial records to make himself a bigger ((and more solvent)) player in the owning game than he was. Del Biaggio is currently chasing bankruptcy protection.

The Bettman is receiving a fair amount of flak these days because he was persuaded in some form or another not to perform his normal due diligence to check Del Biaggio's financial records before he was to become part of the frat.

Leipold also put in another $10-million in the form of a seller's note, and the new owners wanted Leipold to throw more money in ((or find another owner for the group)) if Del Biaggio's involvement disappeared. His original $10-million could have become $40-million.

And it ain't over...

"In contrast to the Del Biaggio loans, Leipold's $10 million seller's note to the Predators was disclosed in the purchase documents. That loan, which Freeman described as seller financing, along with an additional $20 million put in by the local owners, was intended to be a short-term loan.

The bank involved in the deal, CIT Group, had withheld $30 million in financing, pending the changes to the team's Sommet Center lease with Metro. But even after the more favorable lease terms were approved by the city in April, the $30 million didn't come through. So those notes to Leipold and the local group are still outstanding, though they were disclosed in the purchase documents."

The remainder of the Schrade article can be found hyah