by Frank Jewett and John Williams
On April 4th, 2001, HHG Corporation, the owners of Extreme Championship Wrestling, filed for bankruptcy. This bankruptcy filing was not unexpected.
It had been widely reported for several months that ECW was having trouble making payroll and could no longer afford to pay for television air time.
What was not widely reported were the particulars of ECW's finances.
In their bankruptcy filing, HHG Corp. claimed assets of $1,385,500 and
listed debts of $8,881,435, which means HHG was roughly $7.5 million in
debt when they ceased operations. An examination of the details of this
bankruptcy filing gives insight into the business of running a wrestling
promotion in general and into the final months of Extreme Championship
Wrestling in particular.
HHG owed money to wrestlers. HHG listed debts of more than $500,000 owed
to at least 40 workers. These amounts may represent back wages or unpaid
Pay-Per-View bonuses.
The amounts range from $150,000 for Robert Szatkowski (Rob Van Dam) to
$100,000 for Thomas Laughlin (Tommy Dreamer) to $50,000 for Terry Gerin
(Rhino) to $47,275 for Francine Fournier to $21,250 for Michael DePaoli
(Roadkill) to $12,000 for Don Callis (Cyrus) to $5,000 each for Yoshihiro
Tajiri and Francisco Islas (Super Crazy) to "unknown" for James Mitchell
(Sinister Minister) and Jerome Young (New Jack) to $0 for Terry Brunk (Sabu)
and Steve Corino. HHG also listed a debt of $48,000 for Troy Martin (Shane
Douglas).
HHG owed money to their staff and to the professionals and companies that
supported Extreme Championship Wrestling. Amounts owed to staff include
$50,480 for Joseph Bonsignore (Joey Styles), $50,000 for Steve Karel, and
$1,400 for Gabe Sapolsky. Other amounts include $140,000 for the law firm of
Hoffinger, Friedland, Dobrish, and Stern, $50,000 for the accounting firm of
Donohue, Gironda, & Doria CPA, and $11,700 for Discount Travel Services of
Baton Rouge.
HHG also owed money to television stations, radio stations, and production
companies, along with other promotional expenses. These amounts included
$244,000 for MSG (New York), $243,000 for American Cable Productions,
$60,000 for Weigel Broadcasting (Chicago), and $64,000 for William Byrd
Productions, producers of ECW on TNN.
HHG debts included $75,000 for Stonecutter Productions, $35,000 for
Stonecutter Event Promotions, $25,000 for Top Rope Productions, $16,000
for Fox Cable Networks, and smaller amounts for over a dozen television
and radio stations from $2,475 for WEEI radio (Boston) to $2,000 for
WUPA TV (Atlanta) to $1,135 for KSEZ radio (Iowa).
HHG also owed money for rent, equipment, printing costs, and security
related to ECW events. HHG owed $36,341 for BML Stage Lighting, $14,983
for Betz/Larson Event Management, $14,068 for Atlas Protection, $9,883 for
University of Minnesota, $5,953 for Elite Signs, $3,445 for TWC Advertising
Sales, $2,500 for Lehigh University, and $1,579 for Mr. Printer Graphic
Center, among others.
HHG also owed money to former and current business partners. These amounts
may represent commissions on goods already sold, payments for services
already received, or payments such as deposits to fulfill contractual
obligations.
Amounts include $1,000,000 for Annodeus, a subsidiary of Acclaim, $300,000
for Farm Club Online, $250,000 for The Original San Francisco Toymakers,
$150,000 for In Demand, ECW's PPV distributor, and "unknown" for TNN Cable,
ECW's former broadcast network.
HHG also had a number of curious miscellaneous allowances and debts.
HHG allowed for "unknown" debts in at least five personal injury cases,
including the Erich Kulas case. HHG owed $587,500 for World Wrestling
Federation Entertainment, $1,242 for Time Warner Communications, and
$14,455 for a 1998 Ford F800 truck which, according to the bankruptcy
filing, is co-owned by Thomas Laughlin (Tommy Dreamer).
HHG also listed debts owed to members of the Heyman family totalling
$3.8 million. In total, HHG listed debts of $8,881,435 which doesn't
include the "unknown" amounts owed to some workers or allowed for the
settlement of thirteen pending lawsuits and other potential litigation.
With liabilities more than six times greater than declared assets, what
are the odds that HHG creditors, including ECW workers, will collect?
HHG claimed assets of $1,385,500. Assets included accounts receivable of
$800,000 from In Demand, $50,000 from Acclaim, and $10,000 from Original
San Francisco Toymakers. These amounts may represent estimates rather than
actual receivables. Also, the companies who owe these amounts to HHG also
hold receivables from HHG. Those liabilities may end up offsetting a portion
of the $860,000 in receivables listed by HHG.
HHG assets also included $19,500 for Tommy Dreamer's truck, $4,000 in
merchandise, $2,000 in a bank in Jersey City, and $500,000 for an asset
described as a "Tape video library." The actual value of the tape library
is difficult to determine without knowing whether PPV events and ECW on TNN
shows are included and without knowing what rights have already been sold or
leased either in the US or in other countries. Also, an estimated value is
meaningless unless someone is interested in buying the ECW "Tape video
library" for that price right now.
The likelihood of collecting HHG debts seems slim at this point for most
creditors, including former ECW wrestlers and staff. The receivables listed
are probably optomistic estimates. The only other material asset is the ECW
tape library and currently only one company, World Wrestling Federation
Entertainment, is likely to be interested in acquiring that property.
Dispersal of cash generated by the collection of receivables or the sale
of assets would favor creditors with secured claims against HHG.
And so the final chapter of HHG Corporation and Extreme Championship
Wrestling has begun. It is a tale where hopes and dreams are ultimately
replaced by dispair and debts. It is a tale that includes wrestlers,
professionals, businesses, major corporations, partners, rivals, and family
members. It is a tale which will not be fully told in public, but the pieces
of this bankruptcy filing provide clues as to what ultimately became of HHG
and Extreme Championship Wrestling.
