Carolina Panthers owner David Tepper, the wealthiest owner in the NFL, on Wednesday night put his real estate development company into bankruptcy following the scuttled team headquarters project in Rock Hill, S.C.
In a Chapter 11 filing in Delaware federal bankruptcy court, Tepper’s GT Real Estate Holdings LLC, said it had liabilities of between $100 million and $500 million, a similar range for assets and up to 49 creditors.
The move would allow Tepper’s GT Real Estate Holdings LLC, which is a distinct entity separate from the team, to begin a court-ordered process of paying creditors, largely contractors that have been laboring on the site that was to be the new home and practice facility of the Panthers.
In a statement, GT Real Estate (GTRE) said it has received a commitment for $20 million in financing from DT Sports Holding, LLC, subject to court approval, which will allow the company to fund a process to address its legitimate creditor claims, as well as to preserve, protect and enhance the Rock Hill site for the benefit of all stakeholders.
“In recent weeks, GTRE has been confronted with various claims, some valid and some not, from vendors, contractors and other third parties, including York County, S.C. GTRE is taking this action to ensure legitimate claims are processed as fairly and expeditiously as possible under a court-supervised process, and to achieve the project’s orderly and safe wind-down. GTRE intends to resolve its legitimate obligations.”
It is the latest domino to fall in the jarring dissolution of a planned $800 million project the Panthers said would bring jobs and businesses such as retail shops, restaurants and a hotel to Rock Hill, a high school football hotbed located 25 miles south of the Panthers’ existing headquarters at Bank of America Stadium in Charlotte.
During a press conference in April, his first in more than a year, Tepper repeatedly declined to answer questions related to Rock Hill.
An NFL spokesman said he did not anticipate any issues with Tepper’s filing.
“GTRE is not part of the club’s corporate ownership group,” the spokesman said. “GTRE does not own any football-related assets, nor have any football-related assets been pledged in any way toward the costs incurred to date or any remaining obligations.”
The Chapter 11 filing lists contractor Mascaro/Barton Malow as the largest creditor, with an unsecured claim of $26,809,900, which the document notes is disputed. Also disputed is the second-largest claim, $20 million from York County, S.C., that is listed as unsecured. And architect Populous’ $784,534 unsecured claim is also listed as disputed.
The league has very conservative finance rules, though they apparently won’t apply to a bankruptcy filing by an owner’s company unconnected legally to the team. GT Real Estate is registered in North Carolina.
Its 2022 annual report filed with the secretary of state lists Tepper as the only officer, with no mention of the team or his sports holding company. Its 2019 organizing registration filed with the state was signed by Jeffrey Kaplan, an executive at Tepper’s hedge fund company.
But the league could be concerned about the image of its wealthiest owner using the bankruptcy code to avoid paying, at least fully, contractors he hired, did work, and then weren’t needed.
“In the vein of, you know, Donald Trump and (Frank) McCourt, who filed and put the Dodgers into bankruptcy and various other billionaires, putting their companies in bankruptcy, this is just something that they get to do without having to experience any personal repercussions if they do it right,” said Zev Shechtman, a bankruptcy attorney with Danning, Gill, Israel & Krasnoff.
Just because Tepper is a billionaire many times over doesn’t mean he can’t put one of his companies into bankruptcy. Generally, an officer of a company would not be personally liable for its debts, though that might not stop the creditors from making a legal case against him.
“In order to file for bankruptcy, eligibility doesn’t have any particular restrictions, like, you don’t have to be in default or insolvent,” Shechtman said. “Or, you know, even you don’t have to have a specific problem to be eligible for bankruptcy, you just need to file a petition to file for bankruptcy.
“Being a wealthy owner of a company, he hasn’t done anything wrong by just being a wealthy owner of a company or putting the company in bankruptcy if the company is otherwise entitled to bankruptcy, why should he have personal liability?”
Tepper severed his agreement with the city of Rock Hill in April, walking away from an ambitious project that was expected to be completed in 2023. The Panthers had announced in March they were pausing construction on the facility after Rock Hill failed to issue $225 million in bonds to pay for public infrastructure associated with the project.
Tepper, the hedge fund manager listed by Forbes with a net worth of $16.7 billion, invested more than $175 million into the project. The state-of-the-art headquarters had already taken shape, and can be seen from Interstate 77, along with mounds of red dirt and work on a new interstate exchange.
In April, a GT Real Estate Holdings spokesman said in a statement that Rock Hill had become delinquent on its infrastructure bonds in early 2021. A little more than a year later, following what GTRE called “persistent efforts” prodding the city for the public money, Tepper’s company told Rock Hill it had 30 days or the team would move on.
“It is unfortunate that some recently decided to conduct a misguided, destructive public relations campaign to obscure their failures,” the GTRE spokesman said in the statement.
In the meantime, the Panthers will keep their headquarters and practice fields at Bank of America Stadium, one of the NFL’s oldest venues. Tepper said the team recently conducted a feasibility study to see what improvements would be necessary if the Panthers decide to keep playing there in the short term. The team will continue holding its training camp at Wofford College in Spartanburg, S.C.
(Photo: Griffin Zetterberg / USA Today)