Attorneys: Future Legends filed ‘sham’ paperwork to get out of court-ordered receivership

WINDSOR — Attorneys for a lender seeking to protect its property in the Future Legends legal issues are alleging that the sports complex owner submitted “sham” paperwork to get out of having a court-ordered receiver take over its property.

The Future Legends Sports Complex has been embroiled in several court cases and liens for a couple of years. In the last month, Weld District Court Judge Shannon Lyons appointed a receiver to protect the dome (purported to have earned $8 million in 2023), and the unfinished arena and unfinished dormitories, in which lender U.S. Eagle Federal Credit Union claimed an ownership interest after $45 million in loans on the project remain unpaid.

While that Denver-based receiver, Michael Staheli, was assessing the properties and working to get the project out of past-due accounts on the internet, electricity, water and insurance, Future Legends owner Jeff Katofsky proclaimed that the dome was now the property of Future Legends 5 LLC, and filed for bankruptcy for that entity, putting a stay on all efforts to collect, or change the situation.

In court documents filed in U.S. Bankruptcy Court on Friday — while Katofsky’s attorneys were convincing a judge to prevent the town of Windsor from pulling its temporary occupancy permits, which allowed the public to be on the property —  attorneys for U.S. Eagle Federal Credit Union were filing their own paperwork.

U.S. Eagle loaned Katofsky $45 million to complete the dome, the dorms and the arena, but filed in a case involving others seeking payment, essentially stating that their outstanding loans’ should be paid first among others seeking payment. Katofsky had earlier sought court intervention to remove the receiver for incompetency. After the bankruptcy filing, Katofsky filed a motion in court seeking to force the receiver to turn over proceeds and property of the dome; and U.S. Eagle attorneys have objected.

The complicating factor in this bankruptcy is that Future Legends is purportedly owned by seven limited liability companies.

When Staheli was appointed, and began doing his work, Future Legends management presented him with a “sham” lease that suddenly showed Future Legends 5 as the owner of the dome, U.S. Eagle’s motion stated.

“Contrary to the debtor’s shocking misrepresentations in this case and the state court litigation as described herein below, it is Future Legends, not the debtor (Future Legends 5), which owns the real property and dome …”

“Despite the fact that Future Legends owns the Dome Property … Future Legends and Katofsky, presented the receiver with a sham lease, dated August 1, 2024, allegedly executed in the midst of the State Court Litigation and with the knowledge that U.S. Eagle would be filing its responsive pleadings in support of terminating the Lease in the State Court Litigation on August 30, 2024, pursuant to Court order.

“Upon information and belief, the lease was undertaken by sophisticated parties in anticipation of the receiver’s appointment, and it was clearly executed as a strategy in an effort to remove the dome property from the auspices of the then-anticipated receiver’s control, whose appointment which was expected to occur once U.S .Eagle filed its responsive pleadings in the State Court Litigation,” U.S. Eagle documents state.

The problem, U.S. Eagle states, is that there is no documentation of such a sale or change in title with the Weld County Clerk and Recorder. Three of their six loans on the properties, which covered the construction of the dome, were with Future Legends, not Future Legends 5, it claims.

“It is the secret purchase agreement and the sham lease that the debtor improperly seeks to prop up by using this court as an artifice to perpetuate its trickery, and in an attempt to make an end-run around the pending State Court Litigation by seeking to have these issues heard in this forum,” U.S. Eagle’s motion states.

“The receiver swiftly determined the lease was a sham, was for below-market rent (payable in arrears), and that the lease had already been breached, by virtue of the failure to carry the insurance required by the lease,” the motion states.

In his motion to force the receiver to turn over any property or rents during its period of receivership, Katofsky said the lender representative, Chris Balestrino, actually came up with the plan to divide ownership of Future Legends among different LLCs. In his court motion, Katofsky said Balestrino demanded the dome property be moved to Legends 5 in 2022.

Katofsky supplied the court with an email chain in 2023 to attempt to explain the ownership of Future Legends 5, but U.S. Eagle said Katofsky left off the tail end of that chain in which Katofsky stated: “Apparently I am wrong. I thought we changed everything over to FL5 because of some USDA requirements, but we ended up not having to do so.”

“… the Court will have to buy in to the debtor’s absurd position that it owns the dome property, a position belied by Katofsky’s own statements,” the motion states.

Katofsky filed paperwork in the bankruptcy court last week attesting to having insurance on the dome property through September 2025 with NSM Insurance Group of Conshohocken, Pennsylvania.

Katofsky could not be reached for comment, and he did not respond to an email request to discuss the motions by deadline.

On Friday, a guest judge granted Katofsky’s request for an injunction against the Town of Windsor, which was refusing to continue the complex’s temporary occupancy permits for another 90 days, which would have been the eighth continuance, amid continued concerns of public safety and sanitation. That judge granted the injunction for just 14 days. All parties will be back before the judge on that issue on Nov. 12.

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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