Evander Kane’s creditor blows up Sharks wing in scorched earth bankruptcy filing

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San Jose Sharks left wing Evander Kane is a compulsive gambler whose six-week-old bankruptcy filing is designed to protect his considerable assets and “stiffen up” his lenders, one of his top creditors charged in a searing and explosive motion on Friday.

Kane made waves when he filed for Chapter 7 bankruptcy protection last monthdeclaring $26.8 million in debt with $10.2 million in assets, despite signing a seven-year, $49 million contract in 2018. This filing mentioned a gambling loss of $1.5 million, but according to Zions Bancorp’s petition, this underestimated the problem.

Less than two months before filing for bankruptcy, Kane sold two Rolex watches for $75,000 to pay off his gambling debts, the bank wrote, citing changes Kane recently made to his bankruptcy filing. And during a bankruptcy hearing earlier this month, “Kane said he originally borrowed between $600,000 and $700,000 from South River Capital, LLC, to ‘pay the casino debt'” , Gerrick M. Warrington, associate attorney at Frandzel Robins Bloom & Csato, LC, attorney of record for Zions, wrote in a statement attached to the motion.

This motion is silent. He says: “Kane has a serious gambling problem… Kane gambles a lot and makes bad, self-centered financial decisions. He should not be allowed to continue to manage his substantial salary and bonuses, nor to continue to gamble and speculate with his income instead of entrusting it to his creditors. Creditors likely have no faith in Kane’s ability to administer his estate to their advantage. Zions certainly does not. The history painted in the appendices and the state of affairs is not pretty. Kane wasted large sums of money, playing in many different places and in many different ways.

Kane’s attorney, Stephen Finestone, wrote in an email that he had not seen Zions’ filing, but added: “I’m unlikely to get an answer other than to tell you that Mr. Kane intends to oppose the request.

This request seeks to change Kane’s bankruptcy category from Chapter 7, which relates to individuals, to Chapter 11, which relates to businesses. The change would be significant because under Chapter 11, the remaining $29 million on Kane’s Sharks contract would be available to creditors like Zion, which owes $4.25 million according to the filing. It wouldn’t be under Chapter 7, wrote Zions, who argues Kane’s losses are business-related.

Zions, in its motion, also disclosed that it plans to sue Kane for allegedly misleading the bank into obtaining the loan.

“Zions believes there may have been material irregularities in what Kane provided and what he promised Zions when making the initial loan,” the bank wrote. “Zions is evaluating whether to file its cross-complaint to have the debt owed to it deemed non-dischargeable…Zions is advised that other creditors similarly believe that they hold materially false financial statements prior to the request. The investigation into Kane’s behavior prior to the petition has only just begun, and it is currently unknown what other irregularities may be uncovered, triggering further issues for Kane.

At times, the request becomes deeply personal, with the bank calling Kane “venal”, accusing him of “hardening his creditors” and appearing to question his wife’s parenting skills. Kane, in his bankruptcy petition, listed $12,000 per month in child care expenses.

Zions responded to this: “Kane says he needs $12,000 a month in ‘child care and education costs’ to pay for a 24/7 rotation of day and night nurses for a 6-month-old baby, even if his wife does not work outside the home.”

Kane also listed his wife, two uncles, mother, sister, father and grandmother as dependents, which Zions criticized.

“Apparently his creditors should stand by Kane, his wife, daughter and all those close to him for Kane’s lavish lifestyle, and theirs too,” Zions wrote.

Regarding the Rolex watches, Zions asked why the transaction was not listed on the original petition.

“Does anyone telling the truth really not remember shelling out their expensive Rolex watches to pay off a gambling debt, just before filing for bankruptcy? What strong weaponry drove Kane to do this remains uncertain,” the bank added, referring to the new form Kane filed earlier this month that disclosed the Rolex debt-for-gambling swap.

Kane isn’t the only professional athlete to file for bankruptcy. High profile bankruptcies have included Mike Tyson, Evander Holyfield, Michael Vick, Vince Young, Warren Sapp, Antoine Walker, Kenny Anderson, Lenny Dykstra; and in the NHL — Jack Johnson, Darren McCarty and Bryan Trottier.

Some athletes may be overwhelmed with newfound wealth, investing in businesses and funding friends and family. They can quickly leverage their income (Kane in his petition says his income is minus $91,131.13 per month).

But the fact that a creditor is accusing such a prestigious athlete of duplicity and moral failings in a legal push without limits stands out.

Drew Hawkins is the founder of Edyoucore and a financial consultant for athletes who works with Walker, the Boston Celtics’ first draft pick in 1996, and knows many other bankrupt athletes. He said he had not heard of a creditor doing scorched earth on a debtor.

“I’ve never seen this level of detail,” he said, “this level of judgment… It goes beyond being a creditor. To challenge his wife’s ability to be a mother. What gives them the right?

The bank has also requested that an April hearing be pushed back to March, so if the court agrees to change the process to Chapter 11, Kane’s April shark payments would then be available to creditors.

Shortly after Zions filed his papers, the court agreed and set a hearing for March 30.

(Photo by Kane: Matt Kartozian/USA Today)

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