Kings minority owner may lose team stake in personal bankruptcy

Published: Saturday, Oct. 29, 2011 - 12:00 am | Page 1A
Last Modified: Saturday, Oct. 29, 2011 - 11:33 am

A part owner of the Sacramento Kings might be in danger of losing his stake in the team after filing for personal bankruptcy.

Veteran Sacramento developer Bob Cook, who's been a part owner of the Kings since the 1980s, is buried under millions of dollars of debt and could surrender his 7 percent share of the team.

Cook's financial troubles stem from the construction of Le Rivage, the upscale hotel he opened on the Sacramento River in 2008. The hotel defaulted on its debt last year, and Cook filed for Chapter 11 personal bankruptcy protection in August.

Ramping up the financial pressure, one of his creditors is trying to drag into Bankruptcy Court the partnership through which Cook holds his Kings ownership stake.

"We're just trying to get repaid," said the creditor, Martin Boone, managing member of a Capitola firm called Omni Financial. He declined to comment further.

Cook put up his Kings stake as security when he borrowed $10 million from Omni four years ago, according to court records. He defaulted on the debt, which now totals $13 million.

It's unclear what will happen to Cook's 7 percent stake in the team. In court papers, Cook says his Kings ownership stake is exempt from the bankruptcy proceedings. He said the same is true for his 100 percent ownership of the Sacramento Capitals tennis team.

The Kings are controlled by the Maloof family, which acquired majority ownership in 1999.

Kings spokesman Chris Clark said the team would have no comment on Cook's financial issues.

Cook couldn't be reached for comment Friday.

Cook and other minority owners appear to have little if any operational control over the Kings. In February, shortly after it was revealed that the Kings might move to Anaheim, Cook told The Bee that co-owner Gavin Maloof wouldn't even give him details of the negotiations with Anaheim.

Cook said in February he opposed any move but acknowledged it was largely out of his hands.

"As far as what voice I will have, I don't know," he said.

The Kings decided to stay for another year but vowed to leave if a financial deal for a new arena isn't in place by next spring.

Cook is part of the group that bought the Kings and relocated them from Kansas City to Sacramento in 1985. His 7 percent share includes a stake in Power Balance Pavilion.

In closed-door testimony as part of a lawsuit filed by one of his creditors, Cook said in March that he took out a loan from Omni in order to buy additional shares of the Kings. He didn't say from whom he planned to buy the shares.

Last week an Omni affiliate filed an involuntary Chapter 11 petition against Kings Professional Basketball Club. That's the legal entity through which Cook controls his 7 percent stake in the team.

Complicating matters, another of Cook's creditors is laying claim to his share of the Kings. Traynor Marina Investments LLC, which has obtained a $700,000 judgment against Cook, holds a lien on the 7 percent stake, said Traynor attorney Daniel Egan.

Egan said it's uncertain what will happen to the stake.

"There's a lot of different directions that could take," he said.

Cook has developed shopping centers and other properties since the 1970s, but ran into huge problems with Le Rivage. The luxury hotel defaulted on a $25 million loan in September 2010 and was put under control of a court-appointed receiver.

In his bankruptcy papers, Cook said the hotel was appraised recently at $12 million. Three years ago it was appraised at $42.5 million, he said.

Cook listed assets of $858,000 and debts of $48.3 million.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Dale Kasler



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