Bankruptcy Filing
Claiming the local economy was responsible for reduced revenues which made it unable to make payments on the loans used to finance Rose Garden Construction, the Oregon Arena Corporation filed for bankruptcy on February 27, 2004. After negotiations concurrent with the bankruptcy failed to produce a settlement—Allen offered US $90 million, and creditors demanded US $198 million—the United States Bankruptcy Court ordered on November 8 of that year that the OAC transfer the Rose Garden to the creditors.
Several factors contributed to the bankruptcy. Debt service on the loan was expensive due to the undesirable loan terms, the Trail Blazers were not drawing as well due to negative press and a decline in quality of play. In addition, the local economy affected ticket sales, and a lawyer for the creditors noted that OAC was ineffective in luring non-basketball events to the arena. Many of the corporations leasing skyboxes in the arena (a primary source of revenue) declined to renew leases.
Read more about this topic: Rose Garden Arena Bankruptcy
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