CBA Has Thousands Of Creditors
GRAND RAPIDS — About a dozen creditors and former employees of the Continental Basketball Association attended a Section 341 bankruptcy meeting held recently in Grand Rapids. What they learned is that the trustee is still trying to determine the defunct league’s assets and that there are thousands of creditors listed on 700 pages in the bankruptcy documents.
The CBA has approximately 6,000 creditors nationwide seeking more than $4.5 million. The top three local creditors reportedly are owed about $555,000. These are Grand Rapids Basketball Partners, the Van Andel Arena and the city of Grand Rapids. GRBP is the group that sold the Grand Rapids Hoops to Isiah Thomas. The arena was home to the franchise during its days under Thomas’ ownership. And the city said Thomas owes it back taxes.
John Porter, a Belmont-based attorney and bankruptcy trustee, conducted the meeting for all ten of the franchises that were owned by IT Acquisitions LLC. IT Acquisitions is the company that took possession of the CBA when Thomas bought the minor pro league from franchise owners in October 1999.
Thomas placed the league in a trust the following year when he took the head coaching job with the Indiana Pacers. Thomas suspended league play in early February and filed for Chapter 7 bankruptcy soon after.
Porter said he has spoken with many creditors by phone and that the schedules were prepared from CBA records. Harold Nelson, an attorney with Borre, Peterson, Fowler & Reens, said there are more than a thousand pages of schedules. Nelson is serving as counsel for Porter in the proceedings.
At the meeting, the former director of finance for the CBA testified that the league quit operating because it had exhausted its potential sources of revenue and simply ran out of money. He said he compiled a list of the league’s creditors, season-ticket holders and corporate sponsors to the best of his ability, but it was revealed at the meeting that there appears to be some gaps in the document.
Porter said he will continue to process the schedules and try to determine which assets are actually owned by the league. He also said some creditors can be paid by the corporate entity, while others could be owed by individual franchises.
“This case is going to take several years to administer,” he said.
After the meeting, Porter spoke informally with creditors and about a half-dozen former CBA employees of the Hoops. He told creditors that if they haven’t received a notice by now, then they likely aren’t on the list. If they don’t receive a notice by mid-May, then he said they should contact him or the U.S. Bankruptcy Court in Grand Rapids.
Porter also suggested that former employees should speak with an attorney about their claims because filing one is a complex issue. He noted that some wages can be treated as a second priority, placed only behind the cost of administering the bankruptcy process. But filing a claim, he added, doesn’t guarantee that an employee will get paid.
Representatives of the city and the Van Andel Arena did not attend the meeting. Creditors weren’t required to attend the meeting, as missing it doesn’t affect a claim.