When the Boeing 747 and McDonnell Douglas DC-10 earned the nickname “jumbo jets,” airports had to extend their runways to handle the giant airplanes and expand their terminals to handle the passengers. Not every airport expanded, and those that didn’t were shut out of handling the big planes. The thought occurred to me at the time: what if Boeing built an airplane so big that only one airport could handle it?
I could think of no real-life analogue to this whimsical fantasy until I read about the report of the special master in the Oregon Arena bankruptcy. (Brief recap: Oregon Arena Corp., owned by Paul Allen, is in bankruptcy; its major tenant is the Portland Trail Blazer organization, also owned by Mr. Allen.) The bankruptcy judge appointed a respected Portland bankruptcy attorney, David Foraker, to look into transfers made by Oregon Arena Corp. in the several years before it filed its Chapter 11 petition.
What did he find? From 1998 to the time of filing, Oregon Arena Corp. had made $9.6 million of what he called likely “fraudulent” payments to Mr. Allen. (In this context, “fraudulent” does not imply fraud — deception — in the ordinary sense that we use the word, but means that Oregon Arena Corp. was insolvent when it made the payments, and the payee received more money than it would have received if Oregon Arena had filed for bankruptcy.)
The Trail Blazer organization is asserting that Oregon Arena Corp. breached its lease by not maintaining the arena in first-class condition. Oregon Arena Corp. is about to assert that its owner received $9.6 million that should have gone to its creditors, one of whom is the Trail Blazer organization.
The tie-in with my jumbo jet whimsy? Mr. Allen is apparently so rich that the only person he can swipe money from is himself.
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What are your thoughts on the current state of the Arena Corp.?
the arena corporeationn is suck i live in japan and i know how microsoft steals you no need to tell me i know how business is! in japan we dont need wooden slogans or big stadiums we have modestly fund teams tell allen to come to japan where real basketball is played.
I’m pleased to see the creditors take control of the Rose Garden as a result of the bankruptcy of Mr. Allen’s corporation that had owned it, but then, I had also suggested that if Mr. Allen couldn’t afford to operate the Rose Garden, then it should be torn down; if he can’t afford to operate it then no one else can.