Late yesterday, the creditors for the Texas Rangers worked procedural channels and pushed two holding companied under Hicks Sports Group, Rangers Equity Holdings, L.P., and Rangers Equity Holdings GP, LLC, into involuntary bankruptcy.
The petition was filed by several of the 40 primary and secondary lenders, including Monarch Alternative Capital. A statement, released through Perry Street Communications for the lenders, said, “Today's procedural developments, which were discussed as possible actions in Court on May 25, 2010, are intended to ensure that the bankruptcy proceedings meet the objective of maximizing value for all creditors.”
Texas Rangers Baseball Partners, by way of Kekst and Company, released a statement saying:
“The unsurprising action taken by the creditors involves holding companies that conduct no commercial business and have no employees or operating assets. It is nothing more than jockeying for position in an orderly process that was initiated on May 24th. Following the court’s orders, the Rangers are conducting normal baseball and business operations and, importantly, the court has set a schedule that is consistent with our objective of completing the sale of the Rangers to the Greenberg-Ryan group by mid-summer. We do not believe this action by the creditors will affect that schedule.”
On Monday, Texas Rangers Baseball Partners, the current owners of the Texas Rangers Baseball Club, and Rangers Baseball Express, the local investor group led by team president Nolan Ryan and Chuck Greenberg, filed a petition to move the Rangers into voluntary bankruptcy in an effort to push through the$575 million sale of the Club and its lease of the Rangers Ballpark in Arlington, together with the separate sale of 154 acres of land around the Ballpark. The efforts, through a “pre-packaged” plan, is said to be designed to pay any secured and unsecured debt surrounding the Rangers assets.
(See the details of the “pre-packaged” plan filed as part of the voluntary bankruptcy proceedings)
In related news, the Rangers came close to missing operational payroll, something that has reportedly happened prior, but not since the Rangers have been locked in a stalemate with key creditors, Monarch Alternative Capital, Kingsland Capital Management, Sankaty Advisors and Galatioto Sports Partners, over the $575 million bid by a group led by Chuck Greenberg and Nolan Ryan to purchase the Rangers from current owner, Tom Hicks.
The Dallas Morning News first reported that John Blake, the public relations representative for the Rangers said Friday that “paychecks were cut and distributed. The club had been $3.8 million shy of the amount needed to meet payroll, he had said earlier. The overall total paid out was not released.”
According to sources close to the Rangers, the on-going process surrounding the bankruptcy is expected to have no impact on Rangers operations, including paying employees in the normal course of business. The court orders authorized earlier this week provide for pay to employees and use of the new $21.5 million credit facility provided by Major League Baseball.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, as well as a contributor to Forbes SportsMoney blog. He is available for hire or freelance. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.
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