Evander Kane won a big victory in his more than two-year-old bankruptcy case, with a judge recently ruling he could walk away from much of his remaining debt after a contentious saga that spotlighted the Edmonton Oilers forward’s self-described gambling addiction.
The decision does not yet wrap up the Chapter 7 case, as creditor Hope Parker, a former girlfriend who alleges Kane owes her $3 million for abortions she agreed to, has an outstanding lawsuit within the bankruptcy process and a stayed case in civil court. And there is still one more lender with an active claim.
But the judge did rule in Kane’s favor in his case against Centennial Bank. Unless the bank appeals and wins that suit, it will lose its $8 million-plus loan to Kane. When Kane filed for bankruptcy in January 2021, he listed $26.8 million of debts and only $10.2 million of assets.
He ultimately settled with many of the lenders, but Centennial Bank declined to do so, which resulted in a two-day trial, which occurred in January. In the bankruptcy process, objectors who don’t want to see what they are owed vanish can file adversarial cases, which are akin to bench trials. Centennial was seeking to block Kane from scuttling its loan.
“Evander is obviously pleased with the outcome and believes the decision vindicates his right to a financial fresh start through the bankruptcy process,” his attorney, Stephen Finestone, wrote in an email. “A lot has been said in the press and the public about the allegations against him, but a trial in court has a way of bringing forward the facts.
“Now that the issue has been decided in Evander’s favor, Ms. Parker can proceed with her attempt to prove that she has a claim that should not be discharged.”
A lawyer for Centennial wrote in an email no appeal decision has yet been made.
In his 38-page decision, Judge Stephen Johnson of U.S. bankruptcy court, Northern District of California, rebutted all of Centennial’s allegations, including that Kane couldn’t account for the source of all his losses, that his failure to keep proper records mattered and fraudulently characterized his debt as business losses.
“Kane’s effort to stay afloat financially was almost mind-numbingly complicated,” Johnson wrote. “He relied on multiple streams of funding to cover his expensive lifestyle and gambling addiction; including his salary, loans from ‘hard-money’ lenders, and cash he received from individual lenders and gambling winnings.” Hard money refers to high-interest-rate loans.
Kane used the Centennial loans in 2018 and 2019 to pay off other high-interest-rate debt, accumulated from years of gambling and an expensive lifestyle. Kane took out 27 loans between 2014 and 2019, with rates as high as 18 percent.
“I was trying to put out as many fires as I could at any particular time,” Kane said during his trial testimony. “A lot of the times, using gambling as a way to survive, where it got to that type of a point. And there were times where, you know, it did help me survive, and there were times where it buried me, as it has today.”
But while Centennial argued Kane had misled them about his financial picture, Judge Johnson wrote the closing statements on the bank’s loans to Kane specifically detailed that the funds would pay off other debts.
“The story Evander Kane told about his financial predicament may not have peased his creditors,” Judge Johnson wrote. “But Kane’s testimony was thoughtful, coherent, and consistent with the extensive evidentiary record in this case.” In a footnote to this line, Judge Johnson noted just in underwriting fees, Kane between 2014 and 2019 paid $1,174,517.54.
GO DEEPER
50 bets a day, gambling because of lockout losses: Evander Kane’s final pitch for Chapter 11
The judge also rebutted the bank’s claims Kane had falsely filled out his bankruptcy petition by describing it as business and not consumer debt, noting many of the loans were classified as business debt, and some of the proceeds went to fund his training.
He did agree with Centennial that Kane had not kept proper business records but ruled it did not matter because Kane gave credible testimony, and as much of his gambling was done with bookies, there would be no records.
“Kane testified that his use of bookies was very extensive,” Judge Johnson wrote. “On some days, he bet on only one game. On other days, though, he might bet on as many as 50 games at the same time. Kane also testified that the bookies’ websites changed frequently while he was using them. When this occurred, he would be given a new username and password and told to use the new site. He has no records for any of the bookie sites because they were transient and operated online only.”
Kane’s bankruptcy followed in the footsteps of other high-profile athletes’ financial unravelings, and once again underscored the sad stories of sports stars going broke despite ultra-rich compensation. Kane himself has earned over $67 million in his NHL career, according to Spotrac. But as Kane pointed out in his trial testimony, nearly half that was gobbled up by taxes, NHL escrow payments and lost to lockout or pandemic stoppage of games.
While Kane’s bankruptcy might not be unique in sports, it was for the vitriol displayed. Kane’s character was called into question, with his gambling losses and habits hung out for public view.
“There are a lot of contentious bankruptcies or individual bankruptcies when it’s personal like this, but this was definitely up there,” said Schuyler Carroll, a bankruptcy attorney with Loeb & Loeb.
And it’s not done. Parker sued Kane in 2018 in California Superior Court with allegations of Kane agreeing to pay her to abort pregnancies, and then reneging on the payment. When Kane filed for bankruptcy, which stayed the lawsuit, she in turn asserted a claim and then filed the adversarial case seeking to block him from rejecting his obligation.
In a status conference statement filed last week, the parties wrote that they envisioned three to five months of discovery before trial. If Parker were to win the adversarial proceeding, she then could reopen her civil lawsuit in California state court.
There is also an outstanding adversarial case brought by Professional Bank, which lent Kane $1.5 million in 2019, none of which is paid back. The bank claims it was fraudulently induced into making the loan.
There is also one other related matter ongoing. Most of Kane’s loans were arranged by Sure Sports, a firm that connects athletes and lenders. Sure Sports also filed a $1.3 million claim in the Chapter 7 case.
But the U.S. trustee overseeing Kane’s case sued Sure Sports, arguing the firm violated California law in not registering as an athlete agent or financial adviser. Judge Johnson heard arguments on the case on May 9 and said he would decide on it shortly. The U.S. trustee is seeking to not only invalidate the claim but compel Sure Sports to pay the estate hundreds of thousands of dollars.
Required reading
(Top photo: Ric Tapia / Getty Images)