The Dallas Stars hockey team plans to file for bankruptcy this week with a proposal for a quick sale to a Canadian businessman for about $230 million, according to sources close to the talks.
The proposed sale to Tom Gaglardi, whose Vancouver-based investment firm owns Moxie's Restaurants and Sandman Hotels, Inns & Suites, will be subject to higher bids.
However, other interested buyers for the team, which has been on the block for more than two years, are considered unlikely, and the team could be out of bankruptcy in less than 60 days, the sources said.
Gaglardi is expected to have the support of the National Hockey League and he will keep the team in Dallas, the sources said.
Gaglardi did not immediately return a request for comment.
The team declined to comment except to say that it was "currently working closely with the National Hockey League and the team's creditors toward getting a new owner for the hockey club. We are hopeful to have a new owner in place soon," according to a statement.
The league also declined to comment.
Paperwork was being finalized on Monday with a filing expected as soon as Wednesday, two sources told Reuters.
Hicks Sports Group, led by Texas billionaire Tom Hicks, owns the Stars. The group defaulted on $525 million in debt in 2009, which led to the bankruptcy of its other key sports holding, the Texas Rangers baseball team.
The Rangers were sold last year in a bankruptcy auction to a group that included Hall of Fame pitcher Nolan Ryan for $593 million.
A spokeswoman for Tom Hicks declined to comment.
"With the Stars, I don't think you'll see a bidding war," said Michael Cramer, who was president of the Stars holding company from 1998 to 2004. He said so long as the deal is considered fair by creditors, he doubted there would be any challenge to the proposed sale to Gaglardi.
Creditors have until Tuesday to vote, although they are expected to approve the plan.
If no other bids emerge, the team's lenders would suffer a loss, the two sources said. Gaglardi is assuming the team's unsecured liabilities, such money owed to suppliers and obligations for deferred pay, the sources said.
Hicks bought the Stars in 1995 and added the Rangers in 1998.
Under his ownership, both teams enjoyed initial success, with the Stars winning the Stanley Cup championship in 1999.
But an economic recession and financial crisis left Hicks unable to support the teams.
In recent years, the Phoenix Coyotes hockey team and Chicago Cubs and Los Angeles Dodgers baseball teams have also declared bankruptcy.
The New York Post reported on Monday that the New Jersey Devils hockey team may also seek bankruptcy.
Hockey has been harder hit than other sports. Not getting as much of its revenue from television deals as baseball and football, it suffers more when attendance rates fluctuate.
"You're just not dealing with a great number of consumers for hockey," said Cramer, who is currently the director of the sports and media program at the University of Texas in Austin. "It's not like baseball and it's not like football and neither of them have been immune from this (slow economy). So hockey is just further down the food chain,"
(Reporting by Tom Hals; editing by Gunna Dickson)