What does possible bankruptcy mean for Rattlers season ticket holders?Posted: Updated:
PHOENIX -- It appears the Arizona Rattlers and their league might be heading for bankruptcy court, so what does that mean to consumers who paid big bucks for seats??
We aired a report a couple of months ago on the Arizona Rattlers. Since that time, it appears that bankruptcy is even more likely for the league, which leaves Valley consumers out there with a lot of questions.
One question I keep hearing is if they go bankrupt, will I ever get the money back that I spent on season tickets?
Remember Mitch Moody? He purchased $2,100 in season tickets for the Arizona Rattlers just so he could entertain his customers and his employees.
But when the Rattlers and the Arena Football League suspended their season this year, Moody wondered what would happen to his money.
"We're not into giving $2,100 away," he said. "You know, that's the thing. That's not the way I operate."
And now it looks as though the entire league, including the Rattlers, just may go bankrupt.
If that's the case, will Moody and the thousands of other Valley ticket holders ever be able to recoup their money?
"Whether they have a chance of getting their money back is going to depend on whether there is money to distribute to creditors," said Dale Schian, a Phoenix bankruptcy attorney.
Schian, who has nothing to do with the Rattlers' troubles, said customers stand some chance of getting their money returned in the bankruptcy.
"If the company is to be liquidated, then it would come from whatever the assets are to be liquidated and distribute to creditors," Schian said.
So, if the Rattlers file Chapter 11 bankruptcy, Schian says consumers will probably receive paperwork telling them about the filing.
At that time, you will need to fill out what's called a "proof of claim" and when you do that, make sure you indicate on the form that you're a "priority creditor." That way, if the team liquidates, you stand a better chance of getting at least some of your money.
"Those monies that they paid would have a priority of payment or distribution in the bankruptcy up to $2,425," Schian said.
Schian says there's also a chance that the bankruptcy court will assign a committee to represent ticket holders.
"It is possible that the U.S. Trustee's Office will file for a committee for season ticket holders who will then represent all ticket holders and will try to get them repaid their monies," Schian said.
There are a couple of different scenarios that could happen. For instance, the Arena Football League might file bankruptcy and the Rattlers might not.
If that's the case, I'll have to do a follow-up with new options, but this is kind of where we stand right now.