The company that's buying Power Balance LLC out of bankruptcy is talking to the Sacramento Kings about keeping the company's name on the Kings' arena.
A source close to the situation said today that Hanyang LLC of Southern California is talking to Kings' management about "a new type of lease" to keep the arena naming-rights deal alive. The source demanded anonymity because he wasn't authorized to discuss the situation.
The current deal is believed to pay the Kings around $750,000 a year.
Chris Clark, a Kings spokesman, had no comment. Officials with Hanyang couldn't be reached for comment.
Power Balance's bankruptcy lawyer, Garrick Hollander, said today it's his understanding that Hanyang was in discussions with the Kings.
Power Balance filed for Chapter 11 bankruptcy in November after being inundated with consumer lawsuits about the supposed benefits of ts silicone sports bracelets. In court papers, it said it would go out of business by the end of December if it didn't find a buyer.
Hanyang emerged as the leading bidder. In court papers, the little-known company said it didn't plan to go forward with the Kings' naming-rights contract, although several officials familiar with the situation said that could change.
A company buying a bankrupt firm has the right to sever existing contracts, although any debts from those contracts still have to be resolved. Power Balance owes the Kings $100,000 from the arena deal.
Hollander said there were no other qualified bids for the company at the bankruptcy auction Tuesday. He expects the sale to Hanyang to be approved in court Thursday.
A group of creditors had objected to Hanyang's $6 million bid, but the company threw in an extra $1 million and a tentative agreement has been reached, Hollander said.
The majority owner of Hanyang is married to the woman who owns Power Balance's main creditor, a Hong Kong firm that supplies the bankrupt company with its wristbands.
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