Next move in Tepper company’s bankruptcy: Where will the cases be heard?
The lawsuit filed by York County against companies linked to Carolina Panthers owner David Tepper has moved to federal court in South Carolina, most recent court documents show.
Tepper company lawyers say in court documents that they want the case ultimately moved to federal court in Delaware, where a bankruptcy case is pending.
That bankruptcy was filed by the real estate company Tepper created to oversee the failed project in Rock Hill that would have become the team’s practice site and headquarters, according to court documents.
Creditors in the bankruptcy say they want all the cases heard in South Carolina.
Tepper companies lawyers say, in court filings, the move to federal court is required because the civil lawsuit could impact the bankruptcy. The lawsuit originally had been filed in York County civil court.
Conflict over how $21 million was spent
The Tepper companies -- Appaloosa Management, Tepper Sports Holding, DT Sports Holding -- along with the city of Rock Hill, are named as defendants in the $21 million lawsuit filed June 9 by York County.
York County alleges civil conspiracy, negligence, interference with contractual relations and negligent misrepresentation in the lawsuit over taxpayer money the county alleges it spent on the project.
The lawsuit calls the failed effort a “vanity project,” and alleges Tepper’s companies did not use county money for the agreed-upon purpose.
“York County has been damaged by a breakdown between the City of Rock Hill on one hand and Appaloosa Management, LP, Tepper Sports Holding, Inc., and DT Sports Holding, LLC on the other (collectively, the “Tepper Defendants”),” the lawsuit states. “The Tepper Defendants directed the misappropriation of $21 million of statutorily restricted, public funds from their stated purpose, the expansion of a roadway in York County, and improperly utilized these funds on their failed vanity project, the Carolina Panthers’ headquarters and practice facility. Rather than cover the ballooning project budget themselves, the Tepper Defendants took money from York County and its taxpayers.”
The lawsuit also alleges that Rock Hill failed to issue more than $200 million in bonds for the project.
Neither the Tepper companies, nor the city of Rock Hill, have yet filed written court responses to the allegations made by York County in the civil lawsuit.
How bankruptcy will be financed
On July 1, a federal judge in Delaware approved a proposed bankruptcy loan of $20 million from one Tepper-owned company to another Tepper company to help finance the bankruptcy, court documents show.
Judge Karen Owens of the U.S. District Court in Delaware approved a proposal that allowed DT Sports Holding LLC to loan money to GT Real Estate, according to court documents reviewed by McClatchy.
In the bankruptcy, creditors including York County, the city of Rock Hill, and contractors from South Carolina and North Carolina claim they are owed as much as $90 million, according to court documents.
The original plan
The Panthers broke ground in 2020 to build their 240-acre practice facility and head quarters on land in Rock Hill. The site was off Mount Gallant Road near Interstate 77.
The project was predicted to be an economic boost for both the city and South Carolina. It would have been the largest facility of its type in the NFL and was intended to be a sports and entertainment venue.
Construction stopped in March and, GT Real Estate, the Tepper real estate company created to build the facility, filed for bankruptcy in a Delaware federal court on June 1.
According to the filing by Tepper companies, “GTRE is a wholly-owned subsidiary of Defendant DT Sports Holding, LLC, which itself is a wholly-owned subsidiary of Defendant Tepper Sports Holding, Inc.”.
What’s next?
Most of the creditors have filed court documents asking that the bankruptcy case be heard in federal court in South Carolina.
That issue on venue remains pending. Owens, in Delaware, is scheduled to hear arguments about moving the bankruptcy case to South Carolina on July 22.
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This story was originally published July 8, 2022 at 12:45 PM with the headline "Next move in Tepper company’s bankruptcy: Where will the cases be heard?."
