Attendance has plummeted 20 percent
PORTLAND, Ore. -- The company that owns the Rose Garden arena, home of the Portland Trail Blazers NBA franchise, filed for Chapter 11 bankruptcy protection on Friday.
Oregon Arena Corp., whose sole shareholder is Paul Allen, the world's fifth-richest man, has lost $20 million over the past nine years and was headed toward a default on interest payments due Monday.
Allen also owns the Trail Blazers team as a separate company that will not be part of the bankruptcy, said Oregon Arena Corp. President Steve Patterson.
"I want to make it clear that today's Chapter 11 filing does not include the Trail Blazers," he said.
The decision to file for bankruptcy followed a year of unsuccessful negotiations with bondholders who paid for most of the $155 million arena, Patterson said.
The team, owned by Allen through the company Trail Blazers Inc., has also been losing money in recent years because of high player salaries, declining attendance and taxes the team must pay to the NBA for exceeding designated player payroll limits.
The bankruptcy talk comes at a difficult time for the team. Attendance has plunged 20 percent this year as the team threatens to miss the playoffs for the first time in more than 20 years. A number of off-court incidents have also strained the team's relationship with fans.
Bondholders were willing to allow Oregon Arena to refinance the debt if Allen agreed to guarantee repayment, the Oregonian newspaper quoted Patterson as saying in Friday editions.
But Patterson said Allen didn't make that move because it would leave him personally liable if Oregon Arena defaulted.
Allen has a net worth of $21 billion, according to Forbes Magazine.
Copyright 2004 by The Associated Press
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