CBA Files for Chapter 7 Bankruptcy
Thomas's firm reacts to $9 million debt
Grand Rapids, Michigan, February 24, 2001 -- The Continental Basketball Association (CBA) filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court, according to the Yakima (Michigan) Herald-Republic. The bankruptcy filing was done by Isiah Thomas' firm IT Acquisitions and comes as "several of the leagues' now former teams seek money for payroll, ticket holders, sponsors and the unpaid portion" of the $9 million dollars that Thomas acquired when he acquired the CBA in 1999.
Former Yakima Sun Kings GM Rich Austin stated "We never thought he would do this because his name meant so much to him." Since the league suspended operations on February 8, five of its ten teams have been bought back by former owners, who waived any claim to bills owed and joined the International Basketball League, another minor league. The other teams were not bought and are "starting to take action for reimbursement" from Thomas and the league for debts. The Chapter 7 filing will likely end those actions, because filing means that the court will liquidate the leagues' assets and repay the creditors it can, based on priority.
Austin's team (Sun Kings) have outstanding payments owed to them around $400,000, but Austin hopes that overdue payroll comes first. "Not paying bills is one thing, but it's hard to believe he (Thomas) can get away without paying the salaries". Public records from the filing show that Thomas' IT Acquisitions have assets and debts in the range of $1 million to $10 million dollars. The court expects to be able to use some of the liquidated money to pay the debts (Grand Rapids Press, 2/25), but there might be a lot of teams who might never see their money.
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