Pittsburgh Riverhounds Aim to Score Bankruptcy Exit

The Pittsburgh Riverhounds soccer team has a plan to get out of bankruptcy with a new owner: a local businessman who has already extended several million dollars to keep the team kicking.

In court papers, officials asked a judge to approve two bankruptcy-exit plans—one for the team and one for its 3,500-seat stadium on Pittsburgh’s South Side—that would allow Terrance “Tuffy” Shallenberger Jr. to become their sole owner. Right now, Mr. Shallenberger owns a 51% stake in the two partnerships that own the team and the stadium.

The partnerships filed for Chapter 11 bankruptcy on March 26 (several days before the team’s season opener) blaming the larger-than-expected construction costs of Highmark Stadium. Before the stadium opened last year, the team played at local high schools.

The team has never made money, according to documents filed in U.S. Bankruptcy Court in Pittsburgh. If it emerges from bankruptcy with healthier finances, that could help the team with its goal to join Major League Soccer, Team Chief Executive Jason Kutney told The Pittsburgh Post-Gazette earlier this year. Founded in 1999, the Riverhounds play in USL Pro, the third tier of U.S. professional soccer (below MLS and the North American Soccer League).

Facing more than $8 million in debt after the stadium opened, several team owners asked Mr. Shallenberger to lend a hand. He has advanced money to bring England’s Wigan Athletic F.C. soccer team to town and to send the Riverhounds spring training in Houston, according to court papers.

If U.S. Bankruptcy Judge Jeffery A. Deller approves the two bankruptcy-exit plans, several investors who currently own smaller pieces of the team and stadium would be wiped out.

A preliminary hearing on the plans has been scheduled for Sept. 26.

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