A Weld District Court judge ordered the Future Legends organization placed into receivership on Tuesday after the organization and its owner, Jeff Katofsky, failed to repay six debts totaling more than $45 million.
Future Legends was originally billed as a sports entertainment venue that would host tournaments for teams from around the country and be home to the Northern Colorado Owls minor league baseball team and the Halestorm minor league football team, but it has come under intense scrutiny since last year after a string of liens, lawsuits and unpaid bills continued to pile up.
BizWest previously reported that lawsuits for more than $11 million have been filed in Weld District and Federal Court, and liens for more than $13 million have been filed with the Weld County Clerk’s Office.
Weld District Court Judge Shannon Lyons signed an order Tuesday appointing Cordes & Company of Denver as receiver for the property to manage all aspects of ensuring safety and payments. The receiver will be allowed to “manage all assets owned or held by the borrower and all personal property used in connection therewith,” the order states. The receiver will be required to “manage, operate, maintain and otherwise control the receiver property as necessary to ensure that the value of the receiver property does not decline,” the order states. The order gives the receiver the right to change locks, take over finances and hire and fire employees.
Lyons also denied Future Legends’ request for a deadline to respond to its petition with the bankruptcy trustee of U.S. Federal Credit Union.
“The Court has considered U.S. Eagle’s motion and finds that the lenders have established a prima facie interest in the property and that certain structures on the property (particularly the inflatable domes) and the rents and benefits are at risk of being lost or materially impaired,” Lyons wrote. “Accordingly, U.S. Eagle is entitled to appoint a receiver. While the Court recognizes that the appointment of a receiver is an extraordinary legal action, it finds that it is justified in circumstances where the default has been prolonged and the property is at risk of being impaired. The Court will not require the lenders to wait for periodic presentations in order to protect the assets securing their loans to Future Legends.”
According to court documents filed Aug. 30, Albuquerque, New Mexico-based U.S. Eagle is seeking to foreclose on loans guaranteed by Katofsky and Future Legends and to put the assets into receivership. The bank has six outstanding loans on the dome, stadium and team dorms. Currently, the dome and stadium are built and in use, but the dorms are not yet completed and the dome has no running water or toilets.
In August, Xcel Energy threatened to cut off power to the Dome due to unpaid bills. U.S. Eagle Bank reported raising $134,752 to keep the power going.
According to court documents, U.S. Eagle issued the following loans:
A USDA loan for $13 million against the Dome property in October 2021. The bank is seeking $13.76 million, including the outstanding balance, late fees and accrued interest. A USDA loan for $10.6 million against the dormitory in May 2022. The bank is seeking $10.66 million, including the outstanding balance, late fees and accrued interest. A USDA loan for $10 million against the stadium in August 2022. This amounts to $10.7 million. A loan for $5 million against the stadium in August 2022. The bank is seeking a total of $4.9 million, based on the outstanding balance, interest and accrued fees. A loan for $1.4 million against the stadium in June 2023. Of that, $439,802 remains unpaid. The bank is currently seeking $462,971 against that loan, including late fees and interest. And there’s a $6.87 million loan due for the Dome in September 2023, of which more than $4.2 million is outstanding. With interest and fees, the bank is seeking $4.6 million.
BizWest called the trustee, Cordes & Co., Future Legends general manager Casey Kotofsky and Future Legends owner Jeff Katofsky on Tuesday but did not receive a response.