When San Jose Sharks forward Evander Kane filed for bankruptcy in January, just before the start of the season, there was some concern that he would not be available to play in 2020-21. While that has not been the case, a new question has arisen in relation to Kane’s bankruptcy case and his playing future: is this his final season with San Jose?
The Athletic’s Daniel Kaplan and Kevin Kurz write today that Kane, along with the Sharks, filed a motion in United States federal bankruptcy court requesting an extension on the court’s determination as to how Kane’s contract is governed by bankruptcy law and whether it should be assumed as part of reorganization. Their reasoning: as the parties to the contract, they each acknowledge a possibility of rejection of the deal, making the determination a moot point. The court has accepted this motion, delaying the case until June 7. For a San Jose team that is highly unlikely to make the 2021 playoffs, this date falls after the season is over, at which time the two sides could decide to terminate the remaining four years and $29MM of the $49MM pact that Kane signed in 2018.
Why exactly does either side wish to terminate the deal? After all, Kane is the Sharks’ second-best scorer so far this season and a perennial 30-goal, 50-point player who is well worth his value. Kaplan and Kurz posit that for both sides this is simply about saving money in the short-term. While that may seem counter-intuitive for Kane to give up so much guaranteed money, not only is the contract filed as his sole source of employment in his bankruptcy filing, but it was also used to secure many of the loans that he has defaulted on. Removal of the money promised in his contract would fundamentally change the way that his bankruptcy ruling would be organized, denying creditors of their immediate source of repayment. Essentially, the contract is all that Kane has and by removing it before his bankruptcy determination, the result would be very different. As for the Sharks, the team is happy with the play of Kane but as they endure another difficult season and consider a rebuild, $29MM in future salary could be put to better use in a time of financial hardship.
Of course, Kane’s creditors also want a say in the matter. One in particular, Zions Bancorp, has filed a motion requesting that Kane’s bankruptcy case be treated as a business under Chapter 11 rather than as an individual under Chapter 7. They claim that Kane’s losses, mostly attributed to gambling, should be considered business-related. If this change is made, with a hearing occurring later this month, than the $29MM remaining on Kane’s contract would be open to creditors and a lien would be placed on those future earnings. In this case, there would be even more motivation for Kane to terminate the deal. If the contract remains shielded from creditor access, then it is more likely to be honored by Kane and Sharks, especially in the event of a positive decision from the judge on how it should be treated.
The NHL and NHLPA are certainly watching this case closely as well, but as Kaplan and Kurz note there is not much that they can do when it comes to competing with federal law. If the Sharks and Kane decide to terminate the contract in the eyes of the bankruptcy court, that would supersede any collectively bargained rules and processes. However, if this does occur, the league and players’ association could certainly step in to prevent Kane from signing a new deal with San Jose – or with any other team – after his bankruptcy decision has been finalized. Kane is no stranger to off-ice issues and the league may not want to further enable him and set a precedent that their rules can be warped when players get into personal trouble.
There is still much to be decided in this case, but this is now the second time that Kane’s bankruptcy case has come up as a possible hindrance to his participation in the NHL and it likely won’t be the last. With the Sharks now involved, this situation has been elevated from an individual issue to one that could impact the team, the league, and players’ rights. The case bears watching in the coming months.
I get everyone else’s motivation…
Why are the Sharks dishonorably aiding and abetting Kane’s attempts to stiff his creditors?
So they can lose their best player for nothing…?
I agree, ridiculous for this clown to skate on his debts. And then can the team resign him much cheaper? Where’s the pics of him with stacks of cash now?
Ha. You said “skate.”
Jack Johnson went bankrupt, but has kept playing to pay off his creditors.
The weird part is the Sharks helping him. I cannot recall any other example of someone’s employer openly conspiring with them to flout bankruptcy rules.
I hope the Sharks’ plans don’t involve bringing him back on the cheap after the dust settles. That might cause a stink with the rest of the league.
This type of garbage is why us working class have such a hate for millionaires. Dude did nothing but make terrible mistakes. My guess is the sharks are helping him in hopes it helps things go away which is disgusting
link to m.youtube.com
This gives the sharks much needed cap space
I doubt the player’s union will sit idle during this time.
The bottom line is Kane would rather not work and pay off his debt.
It is similar to Kovalchuk as he’s exiting the contract. I’m not sure about U.S. laws but he would not be allowed to circle back and sign a new deal. Can you imagine an owner hawking an underperforming player to look into his background? How about the $4M annual to a 50 goal scorer? Cheaper to file bankruptcy then sign for $10M.
There is much much more to this. I’m surprised the government hasn’t stepped in and found a third party to pay his debt then collect off his future earnings.
Mac Jab.
Watch the SJ owner have Kane gamble with Karlsson. LOL
@Dave – “Hey, EK65! Watch me help us win about $20M at the tables! If I lose, you’ll have to become a dishwasher at this joint, but you’ll get to eat all of the scraps!” :)
Mac Jab-BMF says he looks like Johnny Depp. lol.
@Dave – Now that you mention it…a part-time pirate that has a bit of difficulty pivoting these days, probably due to scar tissue… (AARRRGH!) :)
Kane is in a situation whereby he can no longer work and pay off the debt. That is what bankruptcy is about, which seems to be something some people do not understand.
Companies do it all the time. Sometimes if big enough they ask the government for money (taxpayer dollars). See 2008 for reference.
So Kane is within his legal right to declare bankruptcy.
The real issue is signing a new contract. That’s where things get interesting. In Canada anything you make in and around over 2K, 50% goes to creditors. However cancelling his contract, only to re-sign for less? I wonder how that’ll be taken by the league and players association. It could be viewed as quitting a lucrative job, to take on an less paying one with the same equivalent workload.
It seems to me there is no benefit for Kane to take a lesser deal but for the San Jose Sharks it would be massive. Don’t think other organizations won’t be keeping an eye on this.
A lot of you are mad at Kane, but don’t seem to see the problem of “betting” money you do not have and that being just fine that you can do that. You get in this position because you can take out loans against future earnings or guaranteed money TO PLACE BETS. That’s ridiculous that it’s legal in my mind Idk about you guys. As far as the debt is concerned no one really lost money per se if it’s all from the casino. Weird how many of you are all for these corporate cucks taking advantage of people.
@mydadleftme – Some of us do see that problem. Because of the nature of bet-mongering, this is one of the very rare situations where I’m in favor of laws to be enacted to stop credit card “loans” for betting, or any other entity whose existence would be to perform the same function, especially the casinos themselves. “But, it would hurt their precious business!” So…damn…what. Some people really do have to be protected from themselves.
It’s sad reading the lack of accountability some people have not only for themselves but for others. Kane made horrible decisions. Kane openly and arrogantly treated money like it was never ending. Y’all are blaming the creditors??! No one made him take out loans.
And to the guy that said he can no longer work to pay off the creditors… yes he can. He can drive a 98’ Honda Civic and live in a normal 1500 square foot home and sell off all his fancy crap like the rest of the world has to do when they go broke.
Thank you!
Send a repo man for those tats on his arms…just sayin, not likely to get paid for hockey after that happens.