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Bankruptcy judge OKs Marino loan to Penguins

Friday, October 30, 1998

By Ann Belser, Post-Gazette Staff Writer

Players and staff of the Pittsburgh Penguins will receive their usual paychecks today after an emergency loan to the team from co-owner Roger Marino was approved yesterday by a bankruptcy judge.

Lawyers for the team last appeared before U.S. Bankruptcy Court Judge Bernard Markovitz on Oct. 14, requesting approval for a $2.5 million loan from Marino.

That money was gone by yesterday, and the team once again asked Markovitz to allow Marino to write a new $2.5 million check for his team, with the promise that his money will be the first repaid with 8 percent interest.

The priority payment to Marino is standard for lenders who provide money to an organization that is reorganizing under bankruptcy law, Markovitz said yesterday.

Robert G. Sable, the attorney representing Pittsburgh Hockey Associates, the partnership of Marino and Howard Baldwin, said the money will tide the team over for another two weeks until it can obtain permanent financing.

Sable said the team needs to secure a long-term loan of about $20 million to cover its operating losses for the season.

The team filed for Chapter 11 protection in the U.S. Bankruptcy Court on Oct. 13 to shield it from creditors and allow it to keep operating while it sorts out its financial problems.

Papers filed in Bankruptcy Court show the team is operating under a mountain of debt.

In addition to the $83.7 million owed to unsecured creditors, such as Mario Lemieux's $28.7 million unpaid contract, the team owes $10.25 to the Public Auditorium Authority and $10 million to the bank of America National Trust and Savings Association and other participating banks for a long-term loan. It also has $10 million out in credit and it has $23.5 million in secured notes it owes to three life insurance companies.

In all, the team owes $137.45 million to its creditors.

Last year, the city and county provided $12.9 million for arena improvements with the agreement that the team would stay in the Civic Arena until the year 2007. That agreement may be nullified by the bankruptcy.



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