Thursday, May 15, 2008

A Look At The Debt Of The Sportsman's Park And Club Association In 1898

Late Wednesday afternoon Sportsman's Park and Club filed a chattel deed of trust securing liabilities in excess of $108,000. Chris Von der Ahe is named as trustee. He is also a preferred creditor in the aggregate of $91,000. Thirty other creditors are named with claims ranging from $100 to $3,075. The largest sum is due to the Anheuser-Busch Brewing Company.

The Union Bank of St. Paul has a claim for $1,751.46 and the Northwestern Savings Bank a claim for $100. David Nicholson is a creditor to the amount of (unreadable) and the Laclede Gas Light Company to the extent of $800. The other claims aggregate about $10,050, making the outside indebtedness about $17,000.

The alleged indebtedness to Chris comprises 32 notes of $1,500 each and 20 notes of $1,000 each. One big note of $13,935.72, another of $12,000 and one for $3,950 were executed Wednesday, all three being for a period of six months. The other indebtedness to Chris comprises over 30 counts, running from $50 up...

Von der Ahe is authorized to take charge of the assets, which consist of the entire Sportsman's Park outfit, and sell the property at private sale, in six months. Such assets as remain unsold at the end of six months are to be sold at public sale at the east front door of the Courthouse. He is also directed to keep the property insured for $31,800.

Duly recorded mortgages and judgments against Sportsman's Park and Club are not affected by the deed. Neither are the bonds to the amount of $20,000 guaranteed, by the St. Louis Trust Company. Mr. Becker, it is understood, has as security for his loan a large block of stock enough it is said to give him the controlling interest in the club. He waived protest on the 12th..., on Chris' promise to take up the note for $12,000 up on Saturday, June 15. The deed of trust puts Mr. Becker's security in danger, as the stock will be worthless if Von der Ahe's preferred claims are paid.

While Von der Ahe held the office of president of the corporation, Sportsman's Park and Club could not assign to him and give his claims preference. In order to do this in uniformity to the law, he as the principal stockholder elected B.S. Muckenfuss president and J.W. Peckington secretary and they turned the trick.

The effort to bar out other creditors will be fought bitterly in the courts, and in the opinion of these familiar with Chris' mental abilities, the deposed boss will not be able to stand the ordeal of cross-examination and the chances are that the conspiracy against his creditors will fail in its purpose...

(Muckenfuss stated that) "Mr. Von der Ahe is not at all concerned about what he owes personally, as he is to all intents and purposes insolvent. His real estate is mortgaged to such an extent that his creditors can't realize a dollar on judgments and his personal property is pledged to its full value. What he wants to do is to save something from his base ball interests and his lawyer is hard at work on a scheme with this in view. Then again he is desirous of defeating his wife in an effort to secure alimony. In other words, he don't intend to sell his club or anything he has unless he finds a way to avoid the payment of his debts."

This movement on the part of Von der Ahe confirms the opinion of Mr. John T. Brush that the affairs of Sportsman's Park are in such a rotten condition that it is impossible to give a clear title to its holdings...

The total liabilities (of the club) including the $20,000 issue of bonds and the Becker note for $12,000, as set forth in the Muckenfuss statement amounted to $58,717.54. The debts of the corporation according to the deed of trust aggregate $127,000...

Chris' claims were never referred to and considerable surprise was caused by the announcement that he was creditor of the club to such a large amount as $91,000. The efforts of the other creditors will be directed, so it is said, to establishing in court that his claims...should not be allowed. From the manner and method of the assignment some are of the opinion that Von der Ahe executed a flank movement on his creditors. Others declare that he had gained nothing but time and to do this has had to confess he is hopelessly bankrupt.

The assignment settles one question. The St. Louis Browns will soon pass from Chris' control. Without cash or credit, he can never as magnate or trustee put the team in the field. All his transactions from now on with the railroads and all other parties must be on a cash basis and he is without means...

The troubles of Von der Ahe were not ended when he covered his club with a blanket trust deed. The matured bonds of the club for $20,000, guaranteed by the St. Louis Trust Company, must be paid and the Becker note for $12,000 can not be extended. Other creditors are not idle. Sheriff Henry Troll has levied upon whatever interest the Sportsman's Park and Club has in the following property:

"A lot of ground situated in city block 9,386 beginning at a point in the northwest corner of Grand and St. Louis avenues and extending along Grand avenue...Also, a certain leasehold given and granted by one Jemima Lindell to the said Sportsman's Park and Club on April 1, 1892 for a period of 15 years and six months from said date on (a piece of property on Natural Bridge road)...

Sportsman's Park and Club does not own any of the above described real estate. It only has a lease-hold interest in it.

This levy was made Wednesday by virtue and authority of an execution issued by the Circuit Court...On the strength of this execution the Sheriff announces that he will sell all the right, title, claim, interest, estate and property of the Sportsman's Park and Club to the above described property at the Courthouse February 5.
-From The Sporting News, January 15, 1898

A few notes:

-This particular issue of TSN was not in the best of shape and I found it rather difficult to read the dollar amounts that the article was quoting. While I'm satisfied that I've transcribed the article to the best of my ability, their may be some errors. If the dollar amounts don't add up it's because I read them wrong. I did the best I could.

-Mr. Becker is Edward C. Becker who would come to hold almost all of the stock of the Sportsman's Park and Club Association. By March of 1899, Becker would purchase the club's assets out of receivership and be recognized by the National League as the owner of the St. Louis Browns. He would, at that point, sell out to the Robinsons.

-There are two different sets of numbers in the article. The first comes from the "chattel deed of trust" establishing Von der Ahe as the club's primary creditor. The second set of numbers come from "the Muckenfuss statement." These numbers came out of "recent" negotiations between Von der Ahe and an Indianapolis syndicate regarding the potential sale of the Browns. During the negotiations, Muckenfuss "submitted to (the syndicate) an itemized statement of the club's indebtedness..."


David Ball said...

Well, I wouldn't pretend to understand all this, but I notice it precedes the fire at the ballpark.

Jeff Kittel said...

Yeah, I think we're going to need a lawyer and an accountant to figure out Von der Ahe's finances. It's a mess. The bottom line is that at the beginning of 1898, the Sportsman's Park and Club Association is over $100,000 in debt. Adjusted for inflation, that's 2.7 mil. As a relative share of GDP, it's 77 mil.

This certainly predates the fire (which is in April of 1898). The $20,000 in bonds that the article mentions is most likely the bonds that were used to build New Sportsman's Park. According to Jon David Cash, it's the lawsuits stemming from the fire coupled with the default on the ballpark bonds that forces Von der Ahe to declare bankruptcy and the club to be placed in receivership.

Based on this information, it was going to happen at some point regardless. Von der Ahe was already essentially bankrupt and had no resource to credit. He was in the process of losing control of the team to Becker who had supplied an infusion of cash in exchange for 25% of the club's stock. At some point between Jan 1897 and March 1899, Becker ended up controlling almost all of the club's stock. So the fire wasn't the catalyst for Von der Ahe's fall but was more the straw that broke the camel's back. It was the point from which, regardless of any machinations, Von der Ahe would not recover.

I think what this article is describing is Von der Ahe's attempt to stave off bankruptcy, to keep control of the club in some form, and to put himself in a position to recover financially. If everything had worked out, whatever cash flow the club generated would have went to pay Von der Ahe, Becker, and the St. Louis Trust Company (who issued the ballpark bonds. Von der Ahe then would have regained complete control of the Sportsman's Park and Club Association.