Carolina Hurricanes Owner, Peter Karmanos, Is Being Sued By Three Of His Sons

Peter Karmanos Jr., the owner of the Carolina Hurricanes, has been sued by his three adult sons for $105 million. The sons say they are owed money from a partnership established for their benefit that loaned $101 million to their father.

Karmanos’ professional accomplishments are well documented. He foundedCompuware, which was acquired by private equity group Thoma Bravo in a deal valued at $2.5 billion in 2014, and was selected into the Hockey Hall of Fame last year for his contributions to the development of the game of hockey.

He has also had issues, however. He was fired as a Compuware consultant in 2013 after making a public attack on his new bosses, and a decade-long rift with his son, Jason Karmanos, led to the father firing his son from the Carolina Hurricanes hockey team.

Jason Karmanos and his brothers, Peter Karmanos III and Nick Karmanos, are members in Peter Karmanos Jr. Stock Limited Partnership, which filed suit against Peter Karmanos Jr. the individual.

The partnership was established to “benefit three of his sons” and lists the three adult Karmanos sons, according to the lawsuit. This would allow the father to “transfer valuable assets to them in a tax advantageous manner,”

Thanksgiving at the Karmanos house doesn’t sound like a good time. Dads firing sons, sons suing Dad for money borrowed by the Dad from the trust fund set up for the sons with the Dad’s money. All so he can keep the hockey team he owns afloat long enough to sell it so he can set up his other kids that he had with his second wife. Did you follow all of that?

Not the best situation. And…now the rumor is that this is the main reason why the NHL has been dragging their feet with expansion to Las Vegas.

Per my sources in November, every NHL team had a meeting with their NHLPA rep to inform the players that Las Vegas expansion was a done deal. Being a responsible blogger I ran with that story immediately and said that expansion would be announced no later than the Winter Classic. Yet, here we are. Still no announcement about the Las Vegas Black Knights playing hockey in 2017-18. Why? Because how can you demand a $500M expansion fee when you have a team for sale that is valued at $225M and losing 11 million dollars per year? That’s a tough ask. A potential franchise owner could buy a the Hurricanes for something like $300M, pay a small relocation fee like the True North Group paid($60M in 2011) when acquiring the Thrashers, save money and have an entire organizational structure in place. It’s crazy that the future of the league has been on hold because one owner in a small market has a shitty relationship with his kids, but that’s life in the NHL. There are reports that Las Vegas expansion will be announced sometime in June, but this Karmanos situation is obviously a problem that the league has to keep their eye on.

I think this is how Quebec City ends up getting a team. Karmanos is asking for $400M and to remain in power of the organization as a minority owner. That will never happen. This is starting to look a lot like the Atlanta to Winnipeg situation. Southern franchise losing money and an owner stuck in litigation battles. Atlanta sold for $170M in 2011. Carolina gets shipped North, the NHL doesn’t have to realign, and they keep the 32nd franchise spot open for when Seattle is ready. Everyone wins. Except for Karmanos of course. Unless you count having hundreds of millions of dollars and a smoke wife as winning

There is no chance the team moves back to Hartford. Connecticut is dead. If GE is leaving, the NHL isn’t moving back in.

PS: Full disclosure, I hate Peter Karmanos and I’m kind of enjoying this whole saga. My family moved around a lot when I was kid, but we lived in CT for a while and the only team I really latched on to was the Hartford Whalers. That’s where I first started playing hockey. We would go to 8 or so games a year. Loved the Whale. Then Karmanos came in from Michigan, bought the team, decided to move them to North Carolina and they played their final game on my birthday in 1997. A few years later the Hurricanes made a run to the Stanley Cup Final with Ron Francis, Glen Wesley, and Jeff O’Neil.

Side Note: There needs to be a 30 for 30 on the NHL in the 90s. That was a WILD time. When you see how much Gary Bettman has fought to keep teams like the Coyotes, Predators, and Penguins in their cities and how cautious he’s being with this round of expansion, its inconceivable that he let what happen in the 90s go down. Quebec to Colorado, Winnipeg to AZ, Hartford to Raleigh, expansion to Miami, Anaheim, Atlanta, Nashville, etc. You had that guy with no money somehow buy the Islanders. I need a behind the scenes look at how these expansion and relocation deals went down in the league office.