Kane and Sharks tell bankruptcy court they could cancel contract

When the San Jose Sharks forward Evander kane
filed for bankruptcy in January, just before the start of the season, there were concerns that he might not be available to play in 2020-21. While that was not the case, a new question has arisen regarding Kane’s bankruptcy case and his future as a player: is this his last season with San Jose?

Athleticism Daniel Kaplan and Kevin Kurz reported Wednesday that Kane, along with the Sharks, has filed a petition with the United States Federal Bankruptcy Court seeking an extension of the court’s ruling on how Kane’s contract is governed by bankruptcy law and if it needs to be taken care of as part of a reorganization. Their reasoning: As parties to the contract, they each recognize a possibility of rejection of the agreement, making the determination a moot point. The court accepted the request, delaying the case until June 7. For a San Jose team with very little chance of qualifying for the 2021 playoffs, that date falls after the end of the season, when both sides could decide to end the rest. four years and $ 29 million of the $ 49 million pact that Kane signed in 2018.

Why exactly does either party want to end the deal? After all, Kane is the Sharks’ second-leading scorer so far this season and a perennial 30-goal, 50-point player well worth his value. Kaplan and Kurz postulate that for both parties, it’s just about saving money in the short term. While it may seem counterintuitive for Kane to give up so much guaranteed money, not only is the contract filed as his sole source of employment in his bankruptcy filing, but it has also been used to secure many loans on. which it was lacking. Withdrawing the money promised in his contract would fundamentally change the way his bankruptcy decision would be organized, depriving creditors of their immediate source of repayment. Essentially, the contract is all Kane has, and by removing it before his bankruptcy decision, the outcome would be very different. As for the Sharks, they’re happy with Kane’s game, but as they endure another tough season and consider a rebuild, $ 29 million in future salary could be better spent in times of financial hardship.

Of course, Kane’s creditors want to have their say as well. One in particular, Zions Bancorp, has filed a petition asking that Kane’s bankruptcy case be treated as a business under Chapter 11 rather than an individual under Chapter 7. They claim that Kane’s losses, mainly attributed to gambling, should be regarded as business-related. . If this change is made, with a hearing taking place later this month, the remaining $ 29 million on Kane’s contract would be open to creditors and a lien would be placed on that future income. In that case, there would be even more motivation for Kane to terminate the deal. If the contract remains safe from creditors’ access, then it is more likely to be honored by Kane and Sharks, especially if the judge makes a positive decision on how it should be treated.

The NHL and NHLPA are certainly watching this case closely as well, but as Kaplan and Kurz note, there is little they can do to compete with federal law. If the Sharks and Kane decide to terminate the contract in the eyes of the bankruptcy court, that will override all collectively negotiated rules and processes. However, if that happens, the league and the players’ association could certainly step in to prevent Kane from signing a new deal with San Jose – or any other team – after his bankruptcy decision is finalized. Kane is no stranger to off-ice issues, and the league might not want to activate him more and set a precedent that his rules can be twisted when players have personal issues.

There is still a lot to be decided in this case, but this is now the second time that Kane’s bankruptcy case has been touted as a possible obstacle to his NHL participation, and it likely won’t be the last. With the Sharks now involved, this situation has grown from an individual issue to one that could affect the team, the league and the rights of the players. The case is to be watched in the coming months.

About John Tuttle

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