More Trouble for Sports Franchises? Involuntary Bankruptcy Petition Filed Against Entity Apparently Affiliated With Ownership of Sacramento Kings NBA Franchise

The latest in a series of chapter 11 bankruptcy filings related to professional sports franchises was filed on Thursday in the Eastern District of California bankruptcy court in Sacramento.  Cura Financial, LLC of Capitola, California filed an involuntary chapter 11 petition against an entity named Kings Professional Basketball Club, asserting its interest as that of a general partner.  No other alleged creditors or partners of  Kings Professional Basketball Club are listed on the involuntary petition (a copy of which is embedded below).  As laid out below, it appears that Kings Professional Basketball Club is a legal entity which is a minority owner of the Sacramento Kings.
Sacramento Kings Involuntary Chapter 11 Bankruptcy Petition

While the name of the entity suggests that the involuntary petition has been filed against the legal entity which owns the Sacramento Kings franchise of the National Basketball Association (NBA), it appears to actually be an entity which owns 7.06% of the legal entity that owns the Sacramento Kings.  Various available records reflect that the legal entity which directly owns the Sacramento Kings is Sacramento Kings Limited Partnership, not Kings Professional Basketball Club (see, for example, the listing from the California Secretary of State's website which is embedded below, or these listings from Hoover's and Bloomberg).  The California Secretary of State's online business search does not list a corporation, limited liability company or limited partnership under the entity name of Kings Professional Basketball Club.

California Secretary of State Listing Re Sacramento Kings

There is evidence, however, that the Kings Professional Basketball Club legal entity is related to the Sacramento Kings NBA franchise.  First, Google's news archives reflect that the then-Kansas City-Omaha Kings were sold to Kings Professional Basketball Club, Inc. in May 1973 (see this May 30, 1973 article from the Palm Beach Post).  In addition, the involuntary petition asserts that the Kings Professional Basketball Club bankruptcy is related to an August 8, 2011 bankruptcy filing by Robert A. Cook.  According to several articles (see this press release from the Sacramento Capitals World TeamTennis franchise and this article from Valley Community Newspapers), Robert Cook is a minority owner of the Sacramento Kings.  Finally, the list of Robert Cook's largest 20 unsecured creditors attached to his bankruptcy petition contains a listing for a disputed $13 million claim potentially owing to Omni Financial, LLC, which shares the same address in Capitola as Cura Financial, LLC.  The nature of the disputed claim is listed as "shares of Kings Professional Basketball Club - subject to pending litigation in Santa Cruz Superior Court" (typographical errors corrected from original).  In the schedules of assets and liabilities filed in the Cook bankruptcy case, Cook scheduled his ownership of KPBC (presumably a reference to Kings Professional Basketball Club) and states that "KPBC owns 7.06% of Sacramento Kings, LP and Arco Arena, LP."  The value of his ownership in KPBC was scheduled as a single dollar, but the schedules state that "market value is net value of debtor's interests in these entities less encumbrances."  The list of creditors attached to the petition listed $10 million of Omni Financial's disputed claim as being secured (presumably by the interest in Kings Professional Basketball Club).

At present, no other significant pleadings have been filed in the involuntary case.