Advertisement
YOU ARE HERE: LAT HomeCollections

McNall Creditors Might Not Get Much : Jurisprudence: Trustee report says he could owe $300 million.

October 01, 1994|JAMES BATES and LISA DILLMAN | TIMES STAFF WRITERS

The trustee overseeing the bankruptcy case of King President Bruce McNall says that his creditors will receive "only a small fraction" of what they are owed.

His report, filed Friday in U.S. Bankruptcy Court in Los Angeles, also said that McNall's 28% stake in the team "provides the greatest single hope for any meaningful payment to remaining creditors." The report says that total claims against McNall could be as much as $300 million, although McNall and his lawyers dispute some of them.

McNall bankruptcy lawyer Richard Wynne said it is premature to say that McNall's creditors won't get much money.

"It's a safe, conservative conclusion for a trustee to make. My conclusion is that it's too early to tell," Wynne said.

The report, which recommends that McNall's finances continue to be reorganized instead of liquidated, contains background information about McNall's crumbled financial empire--including that it once involved 65 different companies and more than 130 bank accounts, a number of them foreign accounts.

For the Record
Los Angeles Times Tuesday October 4, 1994 Home Edition Sports Part C Page 4 Column 6 Sports Desk 2 inches; 38 words Type of Material: Correction
McNall bankruptcy--A story in Saturday's editions on King President Bruce McNall's bankruptcy case said mistakenly that James Bailey, a McNall executive, found "various financial improprieties," in January, 1992. The correct time of the discovery was January, 1994.

According to the report, the trustee, R. Todd Neilson, has recovered sports memorabilia items from McNall's former business associate Joanna Orehek, which may be worth as much as $250,000.

Among the inventory are four albums containing what is alleged to be a complete set of 1952 Topps baseball cards, King game jerseys worn in 1991 and 1992 and baseball jerseys autographed by players who wore them--Carl Yastrzemski, Pete Rose, Warren Spahn, Sandy Koufax and Mickey Mantle, to name a few.

Other glimpses of the once high-flying business empire emerged from the report. Neilson said that McNall has an interest in about 46 racehorses in the United States and Europe.

McNall also owns a condominium apartment at Trump Plaza in New York. The debt on the apartment is more than $423,000, which appears to exceed its value. McNall's Boeing 727, which the Kings once used on trips, has recently been levied by the U.S. Marshal, which plans a judgment sale on Oct. 16.

The report also provides more extensive details regarding the financial pressures that forced McNall to sell majority interest in the Kings, saying that "there is substantial evidence that McNall and the McNall companies were in significant financial trouble by 1993," and that McNall admitted to one of his executives, James Bailey, as early as 1992 that he was insolvent.

It also states that in January, 1992, Bailey found "various financial improprieties, including a bank account of the Los Angeles Kings that was not kept on its accounting books and into which millions of dollars were transferred during 1993-94."

As previously reported, McNall has agreed to plead guilty to four criminal counts stemming from a federal investigation into his banking practices.

McNall's lawyers earlier this week reached an agreement with Neilson to give Neilson firm control over McNall's assets, including his stake in the Kings.

But the NHL has made it clear to Neilson that he is subject to restrictions under NHL bylaws regarding sale of the Kings.

Neilson and the lawyer representing him, Leonard L. Gumport of the law firm Hufstedler & Kaus, had alleged that McNall was improperly shielding his assets through a special "creditors trust" set up just before he entered bankruptcy proceedings.

Advertisement
Los Angeles Times Articles
|
|
|