UPDATE #1: Rangers lender Sal Galatioto has sad at today's bankruptcy auction hearing that he is "absolutely" willing to lose Greenberg/Ryan as a bidder adding that it would take 70-90 days to get a new deal in place with other prospective bidders. As a note, this would not include the amount of time that MLB would take to vote whether or not to approve other ownership other than Greenberg/Ryan.
In a Forbes article that I ran yesterday (see Get The Show On The Road With The Texas Rangers Bankruptcy Case), I wrote that an open auction with the group led by Chuck Greenberg and Nolan Ryan in the mix, might not be what the creditors ultimately want.
One could speculate that what is really occurring here is legal maneuverings to kill off the Greenberg/Ryan bid all together; that an open auction really isn’t the end game for the creditors.
The Asset Purchase Agreement – the exclusive agreement between the Rangers and the Greenberg/Ryan group – expires on Aug. 12. It’s possible that one or more of the investors in the group could jump ship at that point, based upon the protracted nature of the bankruptcy case that sees millions of dollars in legal fees being poured into trying to get the case wrapped up, no matter whether you’re the Rangers, the Greenberg/Ryan group, or the creditors. If the Greenberg/Ryan group were to collapse, the creditors would see less return out of the auction, but at this stage, given the heated nature of the legal battle and egos in play, one could say that getting less out of the auction without the Greenberg/Ryan group in play is a victory, of sorts.
That’s no longer speculation.
William Snyder, the chief restructuring officer (CRO), appointed by Judge Michael Lynn in the case, said this morning at an emergency hearing called by the creditors of the Rangers, that the Greenberg/Ryan bid could be lost after Aug. 12 and that he sees the loss of that group from the sales process as a negative effect on the process.
Daniel Kaplan of the SportsBusiness Journal/SportsBusiness Daily, who is reporting from the emergency hearing wrote the following via Twitter (expanded beyond 140 characters by author for clarity):
CRO at Texas Rangers auction hearing:"Banks gave me in writing they would run the risk of losing Greenberg rather than go forward with the process."
This is what egos have wrought.
I also wrote that it was very possible that Jim Crane does not have all the capital on hand at the moment to be able to bid if the auction were to occur on Aug. 4:
Indeed, since the end of May, the creditors in the bankruptcy case have said that “there is a higher bid out there.” Surely, if that were the case, this bidder should be ready to go; planning in advance for an open auction for the club they so wish to purchase. After all, it’s not as if the possibility of the auction hasn’t been out there for months now. Now, you’re saying the “Bidding Procedures do not provide sufficient time”? Let’s get on with it.
The creditors all but admitted that at the hearing this morning, as well. Once again, Kaplan, via Twitter:
Rangers lenders would provide bridge financing to Jim Crane to buy team, CRO William Snyder says at auction hearing.
On bidder Jeff Beck, Kaplan reports via Twitter that Snyder said:
Jeff Beck would have a nine-figure equity commitment personally to buy team; would solicit 3rd party financing.
Kaplan further reports that Crane has made a definative agreement to purchase the club, but according to Snyder, might not if the bid process remains as it currently is. Jeff Beck has not made a definative agreement to pursue a purchase of the Rangers at auction.
Look for updates as they become 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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