Pittsburgh’s Soccer Team Almost Out of Bankruptcy

The Pittsburgh Riverhounds soccer team is preparing to get out of bankruptcy with a new owner: a local businessman whose construction businesses have profited from region’s natural gas drilling boom.

U.S. Bankruptcy Court Judge Jeffery Deller approved two bankruptcy-exit plans—one for the team and one for its 3,500-seat stadium in Pittsburgh’s South Side—that pave the way for Terrance “Tuffy” Shallenberger Jr. to become their sole owner.

The team filed for bankruptcy on March, several days before the team’s season opener, blaming the larger-than-expected construction costs of Highmark Stadium. The team used to play at local high schools.

Team owner struggled to pay back more than $8 million in debt after the stadium opened last year, according to earlier documents filed in U.S. Bankruptcy Court in Pittsburgh. The team has never made money, the court papers said.

Mr. Shallenberger, through his businesses, agreed to extend more than $2 million to pay off the team’s and stadium’s older debts and to put operating money in their bank accounts, said his attorney, David W. Ross.

With healthier finances, team leaders may be able to convince decision-makers at Major League Soccer, the highest level of professional soccer in the country, to let the Riverhounds in. The team, founded in 1999, plays in USL Pro, the third-tier of U.S. professional soccer below MLS and the North American Soccer League.

Mr. Shallenberger already owns a 51% stake in partnerships that own the team and the stadium. Once the bankruptcy plan is executed, several investors who own smaller pieces of the team and stadium will be wiped out, including Pittsburgh accountant David Wilke, who once accused Mr. Shallenberger of breaking his promise to take out the $4.6 million loan.

Write to Katy Stech at [email protected]. Follow her on Twitter at @KatyStech