Forest City aims not to make $31M+ payment to Prokhorov, but also doesn't want to dilute ownership interest in the Nets
Nor did they specify how they'd resolve an August 12 deadline to either extend a forbearance agreement with Mikhail Prokhorov’s Onexim Sports & Entertainment, which owns the majority of the Nets and the minority of the arena, or pay fees greater than $31 million.
Upon expiration of the forbearance period on August 12, 2015, NS&E is required to repay the majority partner approximately $25,000,000 plus related fees. In addition, NS&E is obligated to fund approximately $6,300,000 for its share of a Nets capital call for the upcoming 2015-2016 NBA basketball season by August 12, 2015. If NS&E does not fund the forbearance amounts, related fees and the 2015-16 Nets capital call by August 12, 2015, NS&E’s ownership interests in the Nets will be diluted from 20% to approximately 8%. Based on continuing discussions with interested parties regarding the potential disposal of NS&E’s ownership interests, management believes the value of its current 20% ownership interest exceeds the funding requirement necessary to maintain that 20% ownership interest.“Our intent is to not make that forbearance payment,” responded CEO David LaRue yesterday. “We’ve been having discussions with our partners on ways to not make that payment. But as we indicated in our disclosure, if we had to do, we would."