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Hockey team owner files for Chapter 7

The former owner of a feeder team for a major NHL franchise is currently filing for bankruptcy, according to sources local to the team. Former owner Steve Donner of the Rochester Americans, an American Hockey League team which may be familiar to South Carolina fans, has recently filed for Chapter 7 bankruptcy in a U.S. Bankruptcy Court. This should have no major influence on the team as it stands.

According to the bankruptcy paperwork filed recently, Donner has claimed only $17,000 in assets against a staggering $9.5 million in debt. The majority of this debt comes from an $8.5 million loan from NBT Bank for the design and construction of Sahlen's Stadium. Donner was once a prolific owner of hockey teams, including the Rhinos, the Knighthawks and the Rattlers. He also owned the Amerks when they last won the Calder Cup in 1996.

Now that the filing has taken place, Donner's assets will be liquidated to help pay down existing creditors. This will include the bank to which he owes a majority of his debts. Obviously, in this case, his existing assets will not come close to covering the total amount of debt he owes, so it is likely that the bankruptcy court will formally discharge most -- if not all -- of the remaining unsecured debt.

Chapter 7 bankruptcy is designed to help individuals like Donner who, like some South Carolina residents, has found himself in an untenable financial situation. In cases where the amount of debt far outstrips available assets, Chapter 7 can provide an organized and responsible means for liquidating assets, applying the proceeds to pay outstanding debt and providing a formal discharge for remaining unsecured obligations. This should allow Donner the opportunity to reenter the marketplace free from financial obligations that have become more than he is able to manage.

Source: whec.com, "Former Amerks owner files for Chapter 7 bankruptcy", , July 3, 2014

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