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Judge Expected to Rule in Texas Rangers Bankruptcy Case on Tuesday PDF Print E-mail
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MLB Club Sales
Written by Maury Brown   
Thursday, 17 June 2010 13:55

Texas RangersA U.S. bankruptcy judge was expected to rule Tuesday, June 22 whether a “prepackaged plan” presented by Texas Rangers Baseball Partners, which includes the current owners of the Texas Rangers Baseball Club, and Rangers Baseball Express, the local investor group led by Pittsburgh sports attorney Chuck Greenberg and current team president and Hall of Fame pitcher Nolan Ryan, will be satisfactory to remedy secured and unsecured debt tied the assets around the ballclub.

U.S. Bankruptcy Judge Michael Lynn heard arguments on Tuesday from lawyers for the Rangers and Major League Baseball, as well as lawyers from a group of 40 creditors that are owed $525 million when Hicks Sports Group, the holding company for the Rangers, as well as the NHL Dallas Stars, fell into debt.

The “prepackaged plan” (see details on the prepackaged plan) was reached, without creditor visibility. The creditors claim that they can garner more from the sale by reopening the bidding to Houston businessman Jim Crane.

During the hearing on Tuesday, Judge Lynn said from the bench that garnering the highest bid through the bankruptcy process was not necessary.

Martin Sosland, a lawyer for the Rangers said after going over details on the bankruptcy code that are based upon the lien against the club, "They're entitled to $75 million, and they go away," Sosland said.

Judge Lynn sided with Sosland saying, "I'm inclined to agree with your position on the maximization of value. At this point, you're ahead on that one."

It will be up to Lynn to see if, based upon the Plan, the creditors are impaired in any of the 12 Classes of Claims that are part of the bankruptcy code.

Lynn has said that he sees the holding companies of the Rangers, not the Rangers themselves as a more appropriate avenue for the creditors to extract what they are owed.

If Judge Lynn finds that there are no Class impairments, the creditors in the case would have no voting right to block the Prepackaged Plan, and the Rangers would be allowed to exit Chapter 11 bankruptcy.  At that point, they could move to appeal the case to a federal court within the district, but any appeal would become "moot" as Texas Rangers Baseball Partners can still consummate the sale/Plan over an appeal. The only way for the creditors to prevent that from happening wuld be by having the judge issue a stay on the Plan, but that action is seen to be rare.

If all legal avenues are exhausted by the creditors, baseball's 30 owners would need to approve the sale. Commissioner Selig has said the owners and league support the Greenberg/Ryan group and would move to vote for their approval shortly after the legal process was completed.

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Maury BrownMaury 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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