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Paul Allen's Oregon Arena Corp. seeks Chapter 11 protection

By The Associated Press

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PORTLAND — Paul Allen's Oregon Arena Corp., which operates the Rose Garden Arena, filed for Chapter 11 bankruptcy protection yesterday, claiming losses of nearly $20 million since the home of the NBA's Portland Trail Blazers opened nine years ago.

Calling the financing plan to pay for the arena "fatally flawed from the beginning," company President Steve Patterson emphasized the bankruptcy did not involve the Blazers, the Rose Garden's primary tenant.

The company had been scheduled to make a $3.2 million interest payment Monday.

Oregon Arena is wholly owned by Microsoft co-founder Allen, who also owns the Blazers. On Thursday, Forbes magazine named Allen the world's fifth-richest man with a net worth of $21 billion.

Patterson, who is also the president of the Blazers, said the move will help the company to restructure its debt. It also prevents lenders from pursuing foreclosure.

The bankruptcy filing followed more than a year of unsuccessful negotiations with bondholders who paid for most of the $155 million construction, Patterson said. Oregon Arena has lost money in all but two of the nine years it has operated the facility, he said.

"If we stayed with this financing plan, we were doomed for failure," Patterson said.

The Blazers have also been losing money in recent years because of high player salaries, declining attendance and taxes the team must pay to the NBA for exceeding designated player payroll limits.

The Blazers lease the Rose Garden from Oregon Arena in exchange for 10 percent of ticket sales. The lease runs for another 20 years.

Copyright © 2004 The Seattle Times Company