Judge orders lender to produce documents proving $260M loan to Future Legends

WINDSOR — Frustrations regarding the bankruptcy case involving Future Legends Sports Complex began to emerge Wednesday in a hearing in which one of the top creditors in the case sought to compel a purported new lender to produce proof that it was lending $260 million to Future Legends to get out of debt and finish the complex once and for all.

Future Legends 5 LLC, one of the entities that owns the complex, in October filed for Chapter 11 bankruptcy in Nevada. 

Future Legends owner Jeff Katofsky, complaining during the hearing that he was “a mess” and that he had shingles and was “severely medicated,” stated that he had received the loan, which would be disbursed in three different tranches on Friday, Feb. 7 and Feb. 28.

“I am hesitant to provide specific details in open court on a loan that is not to the debtor,” Katofsky said.  He was referring to the fact that his new loan was to Future Legends LLC, not Future Legends 5 LLC, which is the debtor in the bankruptcy case. “… The loan has been modified, but it is more favorable to Future Legends LLC and more favorable to the debtor ultimately. … I will say those three tranches combined, it will be more than sufficient to solve any matters before this court.”

The frustration wasn’t lost on federal bankruptcy judge Hilary Barnes, as she ordered the purported lender, Phoenix Capital Solutions, to produce evidence of the loan — essentially to comply with a subpoena to produce the documents — in the next 14 days to U.S. Eagle Federal Credit Union, which is owed roughly $43 million in outstanding loans it made to Future Legends.

Future Legends has been mired in lawsuits for the last couple of years for non-payment of work on the complex, which today is only partially complete. The dome property on the complex, which is an indoor series of fields, is the main moneymaker on the property, but it doesn’t have working bathrooms. Youth who use the dome for sports must use outdoor portable toilets. It is because of this and other unfinished work on the property that the Town of Windsor has withheld renewing the temporary occupancy permits. Barnes, however, has prevented the town from revoking the permits until April, when Future Legends can adequately address issues that cannot be solved in the winter months, such as repaving roads.   

Those involved in the case have been hearing about this $260 million loan for several months without any proof it was real. In an earlier hearing, an attorney stating that he represented lender Phoenix Capital Solutions testified that the $260 million loan was real and that a disbursement schedule was being worked out. Katofsky’s attorney, Jeanette McPherson, asked why his word wasn’t good enough.

“It’s slide and defer,” said Richard Holley, attorney for U.S. Eagle in response. “The attorney didn’t even know who he was working for, and he had to look up the exact name of his client when asked.”

Holley said in his 35 years in the business, he’s never been confronted with even basic information being refused like he has had with this case.

“It’s curious to me, that if there is this takeout financing, why wouldn’t you show us, give it to us and tell us so we don’t have to speculate for months about whether it exists or doesn’t?” Holley said. “And whenever U.S. Eagle tries to get documents, it’s objection, objection, objection, and no production.

“If they have it, wonderful, take us out,” Holley said. “But I just don’t have confidence they have the ability to do so. They’ve given me no reason to believe they can do so.”

Barnes, too, expressed frustration in the case. She said it seemed the bankruptcy was being used “as a sword and a shield.”

“The court has been patient and trying to ensure that if this is going to happen, and that nothing is going to be disrupted. Trying to maintain this secrecy about it, especially in this context, is of concern to the court,” Barnes said.

The next hearing in the case involves an evidentiary hearing to determine ownership of the dome property. That hearing has been moved to March 28.

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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