The NFL employs ultra-conservative financial rules in part to prevent its teams from getting ensnared in lending and bankruptcy lawsuits. So when GT Real Estate (GTRE), the developer of the now scuttled Carolina Panthers practice facility and owned by the team owner David Tepper, filed for bankruptcy, a natural question was how that comported with league finance restrictions.
“GTRE is not part of the club’s corporate ownership group,” the league said on June 1 when the Chapter 11 filing happened. “GTRE does not own any football-related assets, nor have any football-related assets been pledged in any way toward the costs incurred to date or any remaining obligations.”
That contention however is being sorely tested as the largest creditor in court filings and during a marathon hearing Wednesday questioned the distinction between the Panthers and GTRE. In essence, a lawyer for contractor Mascaro/Barton Malow, whose court filing objecting to the Chapter 11 says it is owed $80 million, described GTRE as a shell company with the real money and influence coming from Tepper and the Panthers.
“Virtually every aspect of this case is tainted by the control of Tepper and the Carolina Panthers,” the contractor wrote in its motion opposing a proposed loan to GTRE from an entity controlled by Tepper, DT Sports. Later, the contractor wrote there is a “murky and suspicious structure that is the Debtor/Tepper/Carolina Panthers enterprise.” The debtor refers to GTRE.
In fact, the contractor raised the “likelihood that the Debtor’s Affiliates and other insiders (such as the Carolina Panthers) are likely targets of the bankruptcy estate,” meaning the team itself could be dragged into the bankruptcy court.
Mascaro, whose motion is supported by other creditors, argues that GTRE is part and parcel part of the Panthers. GTRE’s main point of contact before the bankruptcy was Panthers COO Mark Hart, Mascaro argued. And the Panthers directly paid $163.5 million of the $283 million spent on the Rock Hill, S.C., development before Tepper shut it down.
Tepper severed his agreement with the city of Rock Hill in April, walking away from an ambitious project that was expected to be completed in 2023. The Panthers had announced in March they were pausing construction on the facility after Rock Hill failed to issue $225 million in bonds to pay for public infrastructure associated with the project.
GTRE filed for bankruptcy on June 1 after having initially paused the $800 million project in Rock Hill, located about 25 miles south of the team’s downtown stadium and headquarters in Charlotte. The Panthers had grand visions for the 240-acre site, telling South Carolina politicians it would bring jobs and businesses — retail shops, restaurants and a hotel — to the area. Construction began in 2020 and the steel frame of the would-be, state-of-the-art headquarters is visible from Interstate 77, along with the work on a new interstate exchange that’s being funded by the state of South Carolina.
Tepper, the hedge fund manager listed by Forbes with a net worth of $16.7 billion, invested the $163.5 million into the project from the Panthers, and another $55 million through DT Sports, Jonathan Hickman, GT’s restructuring officer, testified Wednesday.
The hearing revolved around whether the court would approve $20 million in financing from DT Sports to GTRE, but the undercurrent was the thin lines between Tepper’s sports holdings and the real estate company, which all share the same address in Charlotte.
“Considering the history of insider dealings that predate this Case, including, without limitation, the fact that the Carolina Panthers have admittedly and directly paid the vast majority of development costs to date (most certainly due to the grossly undercapitalized shell company that is the Debtor), rigorous scrutiny must be given to the proposed financing,” Mascaro argued in court papers.
Those papers took shots at Tepper as “one of the most seasoned and crafty players in the distressed market space. He has made his career in leveraging distressed situations to his benefit.”
A GTRE spokesman on Wednesday declined to comment.
Creditor lawyers for Mascaro, Rock Hill and York County spent so much time cross-examining Hickman, largely about the ties between Tepper’s companies, that the hearing stretched more than seven hours and will conclude Thursday.
GT’s corporate filings with the North Carolina Secretary of State list Tepper as the owner, but nothing about DT Sports or the Panthers.
Asked about the allegations of the Panthers’ ties to GTRE, an NFL spokesman replied, “Don’t know anything about the creditor’s claim or if it’s accurate.”
(Photo of David Tepper: Bob Donnan / USA Today)