Texas Rangers exit bankruptcy protection
The Texas Rangers exited federal bankruptcy protection on Thursday, about 14 hours after Hall of Fame pitcher Nolan Ryan’s group was awarded the American League baseball team at a marathon auction showdown with billionaire Mark Cuban.
U.S. bankruptcy judge Stacey Jernigan’s approval of the team’s reorganization plan clears the way for Major League Baseball to formally approve Ryan and sports attorney Chuck Greenberg as the team’s owners next week, before the group’s financing guarantee expires Aug. 12.
The court-appointed restructuring officer and creditors had opposed the bankruptcy plan, filed in May as a way to push through the sale to the Greenberg-Ryan group. But on Thursday, they said they supported the revised plan, in part because the auction resulted in a higher price for AL West-leading Texas.
“I was wrong,” said Andrew Leblanc, an attorney for some of the top creditors. “I’ve never been happier to say I was wrong.”
Creditors will receive $75 million from the team in the bankruptcy plan, but the judge has said they can sue other entities of Hicks Sports Group, which defaulted on about $525 million in loans last year. Rangers owner Tom Hicks is co-owner of the Liverpool football club, which is for sale, but the London sports team is not part of Hicks Sports Group and is safe from creditors in the Rangers’ bankruptcy case.
Rangers attorneys told the judge that all disputes with lenders and others had been resolved, including an objection filed by Alex Rodriguez over concerns that he and other former players may not get the millions that the Rangers owe them.
The Greenberg-Ryan group’s winning bid does include paying more than $200 million to unsecured creditors—including Rodriguez, who is owed $24.9 million in deferred compensation six years after his trade to the New York Yankees.
Mitchell Seider, an attorney for lender JPMorgan Chase, said the company would dismiss its lawsuit that sought to sever the Rangers stadium lease from the sale.
The Greenberg-Ryan group won the bidding war with Cuban, owner of the Dallas Mavericks, just before 1 a.m. Court documents say the winning bid is valued at $590 million.
Cuban and Houston businessman Jim Crane’s bid was valued at $581 million, discounted some $17 million because of deductions and a breakup fee of $10 million to $13 million that would have gone to Greenberg-Ryan had they lost.
“This is quite a remarkable result,” U.S bankruptcy judge D. Michael Lynn said at Thursday’s hearing, before he had to leave and turn the proceedings over to Jernigan. He said he wanted to thank Cuban, who “stepped aside with grace when the time came.”
Cuban was all smiles as he spoke warmly about Ryan and Greenberg after the auction. On his blog Thursday, Cuban said “there were more than a few times I thought we had the thing won.”
“They were arguing about everything and anything to knock down our bid. I thought it was because they were out of it. As it turns out, they obviously were not,” he wrote. “They beat us fair and square.”
The Greenberg-Ryan group had Major League Baseball’s endorsement since being chosen as the new team owners after last year’s original sale process. But the deal was stalled by angry creditors and then, unexpectely, by the team’s May bankruptcy filing.
Last updated: 2:47 pm Thursday, December 13, 2012