Negotiations are ongoing in a dispute between the owners of the New Jersey Devils hockey team, with former Prudential Financial CEO Art Ryan and Patrick Hobbs, dean of Seton Hall University’s law school, working many hours to keep the potential sale of the team out of the courts, according to a source. But longstanding tension between owners could set up a nasty dissolution, another source said.
Ryan and Hobbs sit on the board of Devils Arena Entertainment, but neither have ownership interest in the team: Their role is to serve as outside advisers, and both have been called upon to help mediate a resolution.
The five-member board also includes the company’s financial stakeholders: managing partner Jeff Vanderbeek, Raymond Chambers and minority owner J. Peter Simon. Chambers joined the board when son-in-law Michael T. Gilfillan, chairman of Brick City Hockey LLC, vacated his seat in the past few months, according to the source.
Ryan and Hobbs were brought onto the board after Chambers and Vanderbeek had a disagreement about 18 months ago, according to the two sources. Both sides reportedly had confidence in Ryan and Hobbs, whose role was to serve as advisers on disagreements as well as operations.
In a statement released earlier this week, Gilfillan said, “Our goal was to use professional sports as a catalyst for economic development in Newark by constructing a state-of-the-art arena for the teams, as well as for concerts and family shows. Brick City feels we have accomplished that objective.”
In dispute on a sale is whether Chambers can force Vanderbeek to sell his shares. Gilfillan’s statement indicates Brick City can bring about a sale of the entire team, while Vanderbeek has said he has no desire to sell. It’s unlikely a sale will generate enough money to return the total investment to both sides, setting up a potentially nasty dissolution.
The ownership stakes have not been publicly disclosed, and the role of Simon, the minority owner, remains unclear. Published reports have said Simon has no interest in selling his shares, but a source told NJBIZ that Simon could be a swing vote, noting his father, William E. Simon, and Chambers were co-founders and partners of Wesray Capital Corp., prompting the source to believe the son would side with Chambers.
“But you never know,” said the source. “Politics has strange bedfellows, and so does business.”
Chambers, Vanderbeek and Hobbs did not return calls seeking comment. A representative who released Gilfillan’s statement wrote in an e-mail Thursday, “For the moment, this statement is our only expression.” Ryan and Simon could not be reached.
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