Nashville Predators Owner Sues Team and Chairman

A turf war between powerful business carnivores has progressed to the courtroom, as a Nashville Predators owner has filed a suit against the team and Chairman Tom Cigarran.

Nashville Predators Owner Sues Team and Chairman

David Freeman, who at one point owned 48 percent of the Predators, filed the suit in a Tennessee state court on Thursday according to Nate Rau of The Tennessean. In the suit, levied against Nashville and Cigarran, Freeman seeks $250 million in damages.

Freeman bases his position on two allegedly dishonest business practices by Cigarran. Freeman alleges that Cigarran withheld financial documents due him because of his ownership stake. Freeman’s ownership diminished due to a failure to respond to capital calls.

Capital calls are common practice between membership of ownership groups. Situations arise in which the team needs cash to cover expenses. A response means that the owners retain their stakes. The owners’ stakes diminish if they don’t respond.

Freeman alleges that his failure to respond is due to Cigarran withholding information about the need for capital from him.

Freeman’s second point of allegation is that the ownership group owes him guaranty fees. Guaranty fees are cash payments made to an individual by a group in exchange for that individual providing her/his assets as collateral to guarantee a loan taken out by the group.

Freeman alleges that he was one of two co-owners to act as guarantors, but the group is delinquent on the fees due him.

What happens now?

In response, the Predators issued a short statement that simply denied the allegations. The statement might have hinted at the team’s initial legal strategy as well.

Disputes between owners must be settled by the league, according to the National Hockey League constitution. The Predators’ statement points that out. With that in mind, the Predators will probably ask the court to dismiss the suit altogether.

A dismissal of the suit would probably be just a delay, however. It’s unlikely that the NHL would be able to find a solution that pleased both parties, and whichever side left the arbitration with the short hand would likely file suit. That would put this dispute right back in court.

The timing of this dispute is interesting for the NHL. The ownership of two current franchises are now entangled in lawsuits over finances. Carolina Hurricanes owner Peter Karmanos Jr. is the defendant of a lawsuit right now.

The last thing a league on the verge of expansion needs is two ownership groups whose stability is questionable. That’s the situation that the league will have to deal with regardless of its lack of appeal.

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