Penguins declare bankruptcy

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The Pittsburgh Penguins declared bankruptcy for the second time in franchise history. Citing losses of $37.5 million over the last two seasons and an inability to negotiate a more favorable lease at the Civic Arena, co-owners Roger Marino and Howard Baldwin filed for reorganization under Chapter 11 of the Federal Bankruptcy Code.

"This will have absolutely no effect on Penguins' games, on our payroll, on the club's 1998-99 playing schedule or any of our hockey operations," Marino and Baldwin said in a joint statement. "The team, our season-ticket holders and our corporate sponsors will be protected during this reorganization."

In 1975 the Penguins filed for bankruptcy after the IRS padlocked their offices. The team was then seized and sold to other owners, but citing the Penguins progress with other creditors, namely Mario Lemieux and Fox Sports, the league suggested that this won't happen.

"While we are disappointed ... we have a commitment from ownership that the team will be adequately funded and we are optimistic this process will ultimately ensure that the franchise will be financially and competitively successful in Pittsburgh," NHL commissioner Gary Bettman said.

The team has many problems including a dispute with Mario Lemieux over $33 million in deferred payments to the retired super star. Lemieux had filed a lawsuit against the team, but settled many issues in his suit last week.

The Penguins problems started in 1994 when they lost $25 million during the lockout-delayed 1994-95 season and then-sole owner Baldwin signed bad deals with Fox and Spectator Management, who manages antiquated Civic Arena, for cash to keep the team running.

"The Penguins simply cannot survive with the current chokehold lease," said interim chief executive officer J. Garvin Warden, a bankruptcy specialist hired in August.

It would be in everybody's best interest if the Penguin's solved their financial problems. The team that has sold out most of their home games in the 1990s, still have more than 2000 tickets available for their home opener against the New York Rangers.

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