Former Nashville Predators owner Boots Del Biaggio to be featured on CNBC's "American Greed"

Nashville Predators fans often want to see their team featured more on national television, but Wednesday's night's episode of CNBC's American Greed (airing at 9:00 p.m. Central) is a case in which the exposure isn't exactly flattering. This week, the show, which profiles a variety of scam artists and con men from some of the largest financial scandals in recent years, puts the spotlight on William "Boots" Del Biaggio, who initially appeared to be a white knight helping a group of local businessmen save the Predators for Music City, but instead turned out to be an utter fraud, ripping off creditors and investors for $100 million.

Follow after the jump for a walk down memory lane, and a look at CNBC's trailer for the program...

When "Boots" first appeared on the Nashville scene in the summer of 2007, it was as a prospective majority owner of the team, presumably to relocate the Predators to Kansas City, where he had an agreement with to operate an NHL franchise in their new arena (which still hasn't landed an NBA or NHL tenant to this day). Instead, he eventually joined the local group led by David Freeman as a large minority investor, providing sorely-needed capital to help fend off the advances of Jim Balsillie, who showed both before and after that he'll go to almost any lengths to move a team to Hamilton, Ontario.

Less than a year after he came on board, however, things started to fall apart for Del Biaggio. In May 2008, word came that was being sued for obtaining a loan by posting collateral which wasn't actually his, and failing to make scheduled payments. While speculation swirled about what impact the unfolding scandal might have on the team, I took my stab at the time:

Now, what might this mean to the Preds ownership group? Imagining a worst-case scenario that sees Del Biaggio financially wiped out, a buyer would have to found for his 32 percent stake in the team, and given the circumstances, that buyer (or buyers) might be able to leverage a discount. It doesn't appear that on an ongoing basis the group would have used Del Biaggio to help chip in to cover for operating losses, as they obtained a $20 million line of credit to cover such losses as part of the financing of the franchise purchase. Now, is it possible that Del Biaggio's mess could result in some sort of default relative to that financing arrangement?   

Eventually, of course, the local ownership group was indeed able to buy his shares out of bankruptcy court, but along the way there were some bumps and bruises. David Freeman, who ultimately stepped down as chairman of the team, had to guarantee "an additional $44 million in 2008 to resolve demand of third parties created by the Boots Del Biaggio bankruptcy saga." 

So how did Boots rope in the victims of his fraud? Phil Gregory, an attorney who helped represent some of Del Biaggio's creditors, explains in this CNBC excerpt:


One such instance that played out during the course of the Predators' sale came in October 2007, as both sides were working to consummate the deal. Craig Leipold was trying to wrap things up and move on (as he would shortly thereafter purchase the Minnesota Wild), and Del Biaggio took advantage of that urgency. As told by Sports Business Journal (in a piece that's well worth your time reading):

Leipold was optimistic that the deal would close by October but got a call that fall from Boots that put the closing in jeopardy. Boots said he had cash-flow and personal issues he was dealing with that might prevent him from closing the deal. He added, according to Leipold, "That's unless you can loan me some money until January or February. I can just pay you back in February."

"I think that could work," Leipold said.

Boots got in touch with Leipold's attorney and had his brokerage firm provide the attorney with financial statements detailing his assets. The attorney reviewed them and determined that Boots held three times collateral for the loan in stock.

This aspect of his scheme was particularly devious, working with a member of his brokerage to have falsified account statements available for use as proof of his financial standing. In this case, Del Biaggio duped Leipold out of $10 million.

Once a part of the Preds' ownership group, Boots went to work trying to bring in new investors (presumably required to help repay Craig Leipold among others), hyping the prospects for lucrative relocation opportunities and/or expansion fees coming from the NHL. You can read the presentation (PDF) that he used to try and drum up business for yourself.

As with all such schemes, once the new money stopped coming in, things came apart quickly. Only a matter of months passed from the franchise sale to the breaking of the scandal, and just one year later, in May 2009, Del Biaggio pled guilty to fraud charges. Now, Boots sits in federal prison.

I wonder if they get CNBC there.

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