On paper, Venu Pisike is still Chairman of the USA Cricket Board of Directors.
In practice, that means nothing now.
In an opinion in the US Bankruptcy Court for the District of Colorado on Monday, Judge Michael E. Romero has granted an American Cricket Enterprises motion to revoke USA Cricket’s Subchapter V status and appoint a Chapter 11 trustee. Romero offered a very blunt assessment of USAC’s Board of Directors that validates a lot of the criticism of the Board over the last 36 months:
ACE argues the Debtor’s failure to file a plan by the deadline, mismanaged operations, acrimonious relationship with creditors, and demonstrated inability to function all constitute cause for the appointment of a Chapter 11 trustee. The Court agrees. The Debtor has grossly mismanaged the estate by failing to keep creditors informed by filing the required monthly operating reports and failing to file a plan by the deadline. Indeed, the Debtor has not yet attended the Meeting of Creditors because its CEO furloughed himself before the meeting and remains furloughed as of the date of this order. It is also clear that many of the Debtor’s creditors and business associates, including ACE and the ICC, have little to no confidence in the Debtor’s current management. In fact, four of the Debtor’s own directors assert that the Debtor is incapable of making the decisions necessary to successfully reorganize, and that the appointment of a Chapter 11 trustee is the only viable option for a successful reorganization. Further, the appointment of a Chapter 11 trustee is in the best interests of creditors. A Chapter 11 trustee will be able to file a plan of reorganization and make many of the decisions necessary for the Debtor to reorganize successfully. As such, the Court finds that the appointment of a Chapter 11 trustee is warranted.
The motion arrived less than a week after an expedited hearing on ACE’s motion on January 6. The US Trustee objected to the motion on the grounds that only the debtor (USAC) can revoke Subchapter V status unless that status is found to be materially incorrect under the definitions in the United States Code. There is little in the way of legal precedent around Subchapter V and none of it is binding, so a ruling in this motion could have profound impacts beyond the case itself. The most important one to the UST’s case is In re Free Speech Sys., LLC, a 2023 case from Texas bankruptcy court:
Bankruptcy Code and … Rules don’t provide a standard for assessing a motion to either amend a bankruptcy petition to revoke a Subchapter V election or for the Court to revoke it outright.
It’s like Air Bud: ain’t no rule says a dog can’t play basketball. Or rather, once the dog starts playing basketball, there’s nothing in the rules that can stop him.
It seems like a flimsy defense, and it is, but the court actually sustained a similar objection from the UST on December 15 in denying ACE’s motion then and ordered USA Cricket to file a reorganization plan by December 31 with a warning that failure to comply would likely result in a Chapter 11 trustee being appointed. That can’t be done without revoking Subchapter V, which the court only did after the means afforded to the debtor under the law were exhausted. When USAC failed to comply with the deadline for a reorganization plan, the house of cards just needed a stiff breeze to fall over and got it in ACE’s renewed motion at the end of last year.
The UST has already appointed Mark Dennis as trustee who will, for all intents and purposes, run USA Cricket. The Board’s infighting becomes moot; the Venu Crew has no power or standing, and their position is politically untenable. ACE and the ICC want the board out, major governance reforms, and the restoration of ACE’s agreement with USAC, and they are willing to provide upwards of 80% of USAC’s revenue if they get these things, which are broadly in the organization’s best interests. Given the relatively enormous resources the interested parties can bring to bear, this is the fastest way to get USA Cricket back on its feet and out of bankruptcy - the principal matter the trustee is tasked with resolving. If elections and reforms are the conditions of keeping the business going, they will happen. That’s rare in a bankruptcy, but this is a rare situation.
This won’t be done overnight: it will still take time for Dennis to go through the books and file a reorganization plan. The fact that most of USAC’s largest creditors are currently in Sri Lanka could also delay proceedings. Ultimately, though, this is the moment we go from months of “this will likely happen” to “this is happening.” There is no shot that the trustee lets Venu Pisike anywhere near the levers of power, and the same will apply for the rest of the Board of Directors. The Venu Crew has followed their leader straight off a cliff, extending what could have been a quick and clean exit with a possible eventual return for at least some of them now being bogged down in a circus of court proceedings and lawsuits that have ensured they will never be welcome at the national level again and had no meaningful impact on the outcome.
In the meantime, there are other urgent matters the US cricket ecosystem has to address… like two World Cups and a Qualifier.
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