DALLAS -- The Dallas Sidekicks filed Monday for Chapter 11 bankruptcy protection, a last-ditch effort to forestall a lawsuit by the NBA's Dallas Mavericks that could have put the Major Indoor Soccer League franchise out of business.
Team president David Shuttee said the Sidekicks filed the bankruptcy petition around noon, one hour before the Mavericks were scheduled to file suit seeking to force the Sidekicks to repay a $519,000 debt.
Shuttee said the note of debt dates from 1986, when a group of Dallas businessmen purchased the Sidekicks from Mavericks owner Donald Carter. Carter threatened to shut down the franchise but sold it to a group headed by businessman Stan Finney. The Sidekicks went on to win the 1986-87 MISL championship.
Shuttee said all games would be played as scheduled, including a Monday night exhibition against the Lokomotiv Moscow team from the Soviet Union and the Feb. 22 MISL All-Star Game, which will be played in Dallas.
The Sidekicks are 14-13 in MISL play and tied for second place in the league.
'We intend to receive additional capital from existing and new partners to go forward,' Shuttee said. 'We are preparing a reorganization plan and fully expect to be out of bankruptcy within 60 to 90 days.'
Shuttee said the Sidekicks ownership group signed a $560,000 promissory note when it purchased the team from Carter in 1986. The note was to be paid off by July 1988, but Shuttee said the team has brought in only enough money to cover expenses and pay interest on the debt through last April.
Credits on lease payments at Reunion Arena accounted for the $41,000 in paid principal thus far, he said.
The Sidekicks received notice Feb. 1 that the Mavericks intended to file suit to foreclose on the unpaid note and to exercise their lein on Sidekicks player contracts, equipment and the franchise license.
'We have been in negotiations with the Mavericks to get them to either restructure the note, extend it over three or five years, convert debt to equity and become a partner in the team or to take over operations themselves,' Shuttee said. 'They declined any proposal along those lines.'
Shuttee said the Sidekicks were notified at 11 a.m. Monday that the Mavericks intended to file suit to foreclose on the note, stop the team from playing the rest of its games and sell its player contracts to other MISL teams.
'They said they were going to file suit at 1 and get a temporary restraining order, so we filed for bankruptcy protection about noon,' he added.
The Sidekicks said in a release they must raise $500,000 in new capital, average 10,000 fans a game for the remainder of their home season and be guaranteed 4,000 season-ticket holders for next season to remain in business. The team now has 2,100 season-ticket holders, Shuttee said.