A real estate affiliate of the NFL’s Carolina Panthers said it’s exploring a potential sale of a South Carolina property where construction has been halted on the team’s practice facility and headquarters as part of bankruptcy proceedings.
GT Real Estate Holdings, a business entity formed by the Panthers to manage the disputed construction project, is exploring multiple options for the 234-acre site in Rock Hill, South Carolina, the company said in court filings this week. That could include a sale to a third party or developing the property for a different use, according to attorneys for GT Real Estate.
GT Real Estate filed for Chapter 11 bankruptcy protection in the Bankruptcy Court for the District of Delaware on June 1 after it could not resolve disputes with the city of Rock Hill over financing of the $800 million project. Construction remains unfinished. GT Real Estate is controlled by Panthers owner David Tepper, who has a net worth of more than $16 billion, making him the richest owner in the NFL and the eighth-richest owner of a sports team in the world, according to Forbes.
GT Real Estate “has begun to consider various alternatives for a value-maximizing transaction, including a potential sale ... [and] the redevelopment of the project site,” said Jonathan Hickman, the entity's chief restructuring officer, in a court filing this week. Hickman did not identify the companies that GT Real Estate has contacted about a potential sale or redevelopment.
A virtual hearing on the case that started Wednesday morning and continued until Thursday afternoon featured about a half-dozen lawyers who spent hours questioning Hickman about GT Real Estate's proposed $20 million debtor-in-possession loan from its parent company, DT Sports Holding LLC. DT Sports is affiliated with Tepper Sports & Entertainment, which owns the Panthers.
Construction contractors that had been working on the Rock Hill project and are still owed money complained that the so-called insider loan is from an entity controlled by Tepper and at terms favorable only to Tepper. He is the founder of hedge fund Appaloosa Management and is known as an expert on distressed debt. He acquired the Panthers in 2018 for $2.2 billion.
Insider loans are common in bankruptcy cases but not where an insider will control virtually every major financial decision, said Michael Roeschenthaler, a Pittsburgh-based attorney representing general contractor Mascaro/Barton Malow in the case.
Loan Not Approved
“This is one of the most incestuous cases I’ve ever been involved with or heard of,” Roeschenthaler said during Thursday's court hearing.
U.S. Bankruptcy Court judge Karen Owens did not approve the loan during Thursday's hearing, saying she has concerns about some of the loan terms. She ordered the parties to go back and renegotiate the terms.
Rock Hill officials recruited the Panthers to build a practice facility and the team's headquarters as an economic boost to the small city outside Charlotte, North Carolina. Construction got started in 2020 on the project, which was expected to include a 700,000-square-foot headquarters, practice stadium and surrounding retail.
Rock Hill contributed $20 million to the project, which the city says fulfills its obligations. But the Panthers have said Rock Hill failed to issue $225 million in bonds to partially finance construction. Rock Hill is located about 30 miles south of Charlotte, which is home to the Panthers' Bank of America Stadium.
Mascaro/Barton Malow claims GT Real Estate owes them nearly $70 million for work it had already completed on the partially built project.
“It’s uncertain where this project is going to go,” Chris Shore, a New York-based attorney with law firm White & Case representing GT Real Estate, said during Thursday’s hearing.
GT Real Estate filed the bankruptcy case as a Chapter 11 reorganization “to ensure legitimate claims are processed as fairly and expeditiously as possible,” according to a company news release issued on June 2. But lawyers for some of the creditors are asking the bankruptcy judge to convert the case to a Chapter 7 liquidation, which would give creditors a better shot at recovering some money. If the case remains a Chapter 11, “I’m pretty confident that creditors are going to get very little to nothing in this case,” Roeschenthaler said Thursday.
Other creditors include Kansas City, Missouri-based Populous Inc., lead architect for the project; Olathe, Kansas-based engineering firm Terracon; Duke Energy, the largest electric power utility in the Carolinas; SteelFab, a steel fabricator; and York County.
Separately, several creditors have asked that the bankruptcy case be transferred to bankruptcy court in South Carolina, since most creditors are located near the construction site.
The judge did not make a decision Thursday on converting the case to a Chapter 7 or on change of venue. The next hearing is scheduled for July 5.