For years the Carolina Hurricanes franchise has been losing money. That’s really not a surprise considering the woeful attendance numbers they’ve had pretty much every season since their improbable 2006 Stanley Cup winning run. Their numbers have been in the basement for years, usually only ‘beaten’ by the Coyotes for the lack of butts in the seats every game.
The team’s balance sheet has been in the red consistently, season after season. The expenses involved in running multiple hockey franchises in non-traditional markets, being responsible for day-to-day expenses and maintenance of an under-utilized NHL-calibre facility, and being on the losing-end of an arena contract involving a quasi-governmental body and a state-supported public university, haven’t helped at all.
Well now you can add a $105 million lawsuit to the headaches facing Hurricanes owner Peter Karmanos, Jr.
The kicker? The plaintiffs are his sons.
My Three Sons
According to WDIV Detroit, the legal dispute centers on Peter Karmanos’s will, which stands to give substantial amounts of money to his three sons, Peter III, Nick and Jason. Trusts were set up for the three siblings, and were made up of Compuware stock.
Apparently, Peter Sr. had to start dipping into those funds back in 2013, taking out loans for more than $100 million, and agreeing to pay all of it back by 2022, or upon his death, with interest.
So what’s the problem you ask? It’s still his money, he’s still alive, and he promised to pay it back so it was there for his sons when he did pass away.
Well, he missed a payment.
According to the lawsuit filed last Thursday, “on or about April 21, Peter the third … sent his father a notice of default of balance of principal and interest on the June 2013 note.”
In the court filings the sons claim their father “failed to timely cure such defaults and accordingly, on or about May 25, 2016 the entire balance of the June 2013 note … more than $105 million … would become immediately due and payable.”
Yeah. Daddy missed a loan payment to his sons’ trust fund (which they don’t get unless he’s dead) and they’re suing him for the $105 million (which, I guess, is still his money) they say he owes them.
This type of family estate issue would normally be filed in probate court, and handled like other cases involving the will of a family member and the handling of estate assets. Peter Sr.’s three sons, though, decided to go the more litigious direction, filing the suit as a civil case claiming this is a contract dispute rather than an estate issue.
All in the Family
There have been rumors (and some public evidence) of bad blood between Daddy and his Boys for years, and clear evidence of Karmanos’ own financial difficulties.
Jason’s sudden ‘departure’ from the Hurricanes organization back in 2013 wasn’t as clean and friendly as Hurricanes general manager Jim Rutherford’s was when he left for Pittsburgh soon after. And Jim’s farewell involved a public dressing down by his former boss.
And the rumors of the senior Karmanos’ financial woes, and therefore the woes of the Hurricanes, have not been secret. His ‘difficult’ departure from Compuware, a company he founded, has been well-documented in both news articles and lawsuits.
We’ll all have to hang on to find out what happens next between the former computer executive and hockey franchise-owning father, and his three adorable and loving sons.
Stay tuned for the next episode of “As the Hurricane Turns.”
Grew up in the ‘hockey town’ that launched the careers of Bob Gainey, Roger Neilson, Scotty Bowman, Chris Pronger and Steve Yzerman, to name only a few – Peterborough, Ontario. Spent a misguided life in the world of politics. (Sorry Mom) Trying to atone for those sins by publishing the best hockey stuff available. You can email me directly at Dean@TheHockeyWriters.com. I don’t accept emails written in Sanskrit or asking me to help you transfer your family funds from Nairobi…even if you are a Prince. Thank you.