Bankruptcy judge to decide Friday if Future Legends occupancy permits will be extended

WINDSOR — A federal bankruptcy judge will likely decide on Friday, Jan. 10, whether to extend Future Legends Sports Complex’s temporary occupancy permits, having listened to Windsor and Future Legends officials in a two-hour hearing on Wednesday.

Nevada bankruptcy judge Hilary Barnes took the first few minutes of the hearing to discuss her reasons for denying a motion to change the venue of the Future Legends 5 LLC bankruptcy case to Colorado, noting that changing the court would delay the case even further, disturbing already established deadlines and hearing dates. Since her hearings are all held virtually, she said, being in Nevada courts would not be an inconvenience for those participating in the case.

The parties also came together Wednesday for owner Jeff Katofsky’s motion to extend the complex’s temporary occupancy permits for 90 days. The Town  of Windsor has extended the complex’s temporary occupancy permits seven times, and they’ve twice been extended through the courts. They will expire on Jan. 11, which will essentially put a stop to all activity at the unfinished complex that has been mired in liens, lawsuits and a bankruptcy in Nevada courts.

The temporary occupancy permits have allowed the complex to support youth and adult sports on site, as well as its professional baseball and soccer teams’ use of the facilities, despite having no working bathrooms in the dome, the main stadium being held by temporary bracing for the past two years, inadequate lighting, and the need to completely re-surface the road leading into the complex.

The town has been unwilling to extend the permits without necessary work being completed; the bankruptcy court has intervened twice now to extend them on an emergency basis, given that the promise of a $260 million loan Katofsky has said he’s obtained, which he said is dependent on those permits being in place.

On Wednesday, Barnes heard testimony from town officials and Katofsky’s attorneys Jeanette McPherson and Patrick Casey. They also heard from Howie Ehrlich, the attorney who has declared in court documents that Katofsky has received a $260 million loan from Phoenix Capital Solutions to cure the property’s debt and finish the site.

However, there to date has been no documentation that the loan has been issued, and Ehrlich stated that the lender was going to meet with Katofsky on Monday to determine a disbursement schedule. He said he could only venture a guess as to the first disbursement but said it could be $20 million.

Windsor town attorney Dan Money said he’s heard this before.

“Several months ago, the Phoenix Capital letter was given to the town, stating the financing was coming, and representing that financing was going to be in place, and the TCOs have been in place since then. Why is it that the loan hasn’t come through in the past few months?”

Ehrlich said he had received the requests for the loan documents, adding, “I’m working through producing the documents through Phoenix and working with recently retained litigation counsel, who is still getting up to speed, determine what we believe to be in scope.”

Ehrlich said there were some underwriting matters that needed to be addressed, which have since been taken care of. “That’s why we’re meeting Monday in person,” Ehrlich said.

Money complained that it is always something. The money will get here or the problem will be fixed tomorrow or next week or in 30 days.

“As far as the likelihood of a successful reorganization, the town has concerns that there have been multiple, multiple (statements) … that funding has come in, tomorrow, Monday, always the next week,” Money said. “Why is it always a week off or another 30 days? That’s been happening for months upon months. The town doesn’t have anything showing that financing is going to come in.”

Future Legends attorneys complain that the Town of Windsor has done nothing but put up roadblocks to prevent Katofsky and his new contractors from finishing the issues that are subject to the town’s safety and health concerns on the property.

“The town has not established a hardship other than to essentially express their annoyance with the situation,” McPherson told the judge. “They want the issues in the TCOs fixed, we want to fix them, but based on the roadblocks that have been thrown up … the town must not perceive the issue in the TCOs as being a real hardship to them. Because they would want them resolved as quickly as possible. They’ve been extended multiple times, and there has been no presentation that there would be a hardship in a further extension.”

A key issue is that the plans for the complex, though initially approved by the town, are now considered expired with the building permits. That means that any new work on the property will need to go through the town’s approval process, wich could take up to six weeks.

Katofsky has sought to continue with the original plans on the complex, but the town has requested that the designer of those plans, Galloway, sign off because it is copyrighted material. Galloway has a $409,000+ lien on the property for unpaid work. They would not sign off, McPherson said. But the town said it would accept an affidavit from Katofsky stating that he has the right to use those plans, which they would require in case Galloway sued for copyright infringement. Attorney Casey, in his questioning of town officials, seemed to be making the argument that because the plans were filed by Galloway as an agent of the owner of the property, the plans were by default the property of Future Legends.

Given the timing and the weather, everyone agreed, it is likely that the required roadwork to satisfy town concerns will not be able to even get started until the spring.

Barnes opted to continue the hearing until 10:30 a.m. Friday, the last day on which a decision on the extension will have to be made.

Cases cited:

Case No. 24-51031, Chapter 11 Bankruptcy, In re: Future Legends 5 LLC, in United States Bankruptcy Court, District of Nevada, filed Oct. 15, 2024.

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