Maybe the slogan for the Texas Rangers should be, “Expect the unexpected.”
The latest twist in the sale of the Texas Rangers happened quietly on Friday as J.P. Morgan Chase filed a lawsuit against Hicks Sports Group, the holding company of the Rangers over the handling of the lease agreement. First reported by Barry Shlachter of the Ft. Worth Star-Telegram, “Chase argues that Hicks Sports Group, the parent of the team, made amendments in 2009 and in May that transferred the city-owned stadium's lease directly to the team without the bank's required consent as part of its loan agreement.”
HSG's maneuver, the suit alleges, would limit to $75 million the amount lenders were guaranteed from a $425 million loan and revolving credit set up by Chase in December 2007. No such limit existed on the lease before the transfer, it claimed. Chase was granted the right to approve lease transfers by HSG in the loan agreement, the bank says.
As the Star-Telegram states, no prospective owner would likely bid on the sale of the Rangers with the lease of Rangers Ballpark in Arlington in doubt.
In other Rangers bankruptcy news, a Tues. hearing could determine if the Aug. 4 auction for the sale the Rangers assets is to occur. The Ad Hoc group of first lien lenders have pushed for an open bidding of the Rangers for months, but now say that the Aug. 4 auction date is insufficient time for other bidders to pull together the requisite funds.
More news as it becomes available.
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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