Future Legends asks judge to remove receiver to avoid potential bankruptcy

WINDSOR — The owner of the embattled Future Legends Sports Complex is requesting that a receiver appointed to take over portions of the project be removed before his presence and “incompetence” pushes the project into bankruptcy.

In a 33-page court filing this week, Future Legends owner Jeff Katofsky requested that Weld District Court Judge Shannon Lyons rescind his order to put the complex under receivership. Earlier this month, Lyons appointed a receiver for three structures at the complex: the dome and the partially built dorms and pro stadium, after lender U.S. Eagle Federal Credit Union sued, alleging nonpayment of $45 million in loans. Lyons appointed Michael Staheli of Cordes & Co. in Denver as receiver for the property.

Katofsky’s filing states that the receiver has no idea how to run a business like Future Legends, and his presence could jeopardize plans for future funding of the project to pay off its bills.

Future Legends has been mired in lawsuits and liens in the past two years for payment problems. At present, lawsuits claim $56 million in unpaid bills, and there are $13.9 million in liens encumbering the property.

The project is a 118-acre complex that is the home of the three professional sports teams, and is used by youth sports leagues and Windsor recreation. The project was supposed to be a national draw for youth sports for tournaments and tourism, bringing in 1 million visitors annually. But to date, only the collegiate stadium is completed. The dome, which is used for indoor soccer and other sports, is functional, but the bathrooms are without running water, so the complex must rely on portable toilets. The entire project also is under the ownership of several limited liability companies, with loans linked to different LLC and parcels in the property.

“Future Legend’s’ business is highly complex and specialized, and it is not a simple business where an outsider can step-in and smoothly transition operations,” the filing states. “Running a multifaceted youth and pro sports facility, with dozens of events weekly involving thousands of children and their parents is a specialty. It is complicated, requires planning, as most events book a year in advance (Future Legends already has over 100 future booked contracts for hundreds upon hundreds of events) and specialty training and experience.

“U.S. Eagle presented no evidence to establish that Cordes is qualified to manage the property or its specialized operations. Because of this inexperience, the appointment of a receiver will inure to the detriment of the public,” the filing stated.

In an interview Thursday afternoon, Staheli said he feels comfortable in his role.

“Our company has been involved in over 500 receiverships across numerous industries and I’ve been involved in over 100,” Staheli said. “It is true this is a specialized business, but I would hire a manager who has experience in managing a sports venue such as this, and I’m in the process of interviewing two of them. I’m comfortable that whoever I decide to hire would do a good job of managing that business.”

The filing states that the appointment of a receiver has already “caused a contractual forfeiture and is a violation of the professional sports franchise agreements, and which the three professional sports teams are worth approximately $50 million.” It states that franchise agreements with two hotels also are in jeopardy.

The filing states that Future Legends is worth about $400 million, and that Katofsky is in the middle of securing a loan with Pro Players Holdings LLC and Phoenix Capital Solutions for $260 million that will cover U.S. Eagle’s loan and pay off the many liens filed on the property in the last year.

“The appointment and continued control by a receiver will likely have a chilling effect and cause Pro Players to withdraw from loan negotiations,” the filing warned. “If Pro Players withdraws from the loan, the Future Legends Project will surely be irreparably harmed, and excluding a bankruptcy filing, it will be highly unlikely that Future Legends will be in a position to obtain the financing to repay U.S. Eagle while the receiver is in place.”

In another recent court filing, Katofsky alleged that U.S. Eagle and general contractor Jaco General Contractor Inc., conspired to put Future Legends in financial distress.

In this week’s filing, the document states that U.S. Eagle representatives “induced subcontractors to perform work by promising payment,” but never made good on their promises.

“All funding for such work of these trades was budgeted and available in the U.S. Eagle loans,” the document states. “Because of U.S. Eagle’s promise, Future Legends’ property was unnecessarily encumbered with liens and the reputational damage to Future Legends is almost insurmountable. … Had U.S. Eagle paid the necessary funds (even without a draw request from Jaco) liens would not have been placed on the property. Future Legends contends that this scheme was contrived by U.S. Eagle to place Future Legends in financial distress, and in a position where U.S. Eagle could declare default under the loans.”

The documents claim that a representative of the credit union repeatedly tried to get Katofsky to sell or turn over the project to others at a substantial discount. He claims that representatives of U.S. Eagle and Jaco worked together to “choke off” Future Legends’ income streams.

The filing states that “the economic impact from U.S. Eagle’s refusal to pay funds is staggering.” At present, because the dome is not fully functional, it is limited to 400 people using the facility per day. At full operation, it is supposed to be able to accommodate 15,000 to 17,500 daily visitors, all of whom could be buying food, alcohol and merchandise, the filing states.

BizWest reached out to Jaco General Contractor for comment, with no response.

• *This story has been updated to add comments from the court-appointed receiver, Michael Staheli.