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United League Baseball declares bankruptcy

The Texas-based circuit, besieged by three lawsuits and the potential loss of two ballparks, has declared Chapter 11 bankruptcy. And without a 2009 schedule released, it’s questionable whether the league will be back this season.
United Sports Equities — the holding company for independent United League Baseball — has filed for Chapter 11 bankruptcy in a Broward County (Fla.) court, bringing into question whether the team will operate during the 2009 season.

The league lists debts of $264,494.55, including $22,000 owed in back rent to Harlingen and $60,000 to league founder Byron Pierce. In recent years the league has centrally operated six teams, but the league was locked out of its Harlingen home last fall and creditors seized the San Angelo ballpark, putting it up for auction.

Chapter 11 is the most basic of bankruptcy filings, asking the court for protection while debts are restructured. However, creditors must agree to any restructurings, and given Pierce and fellow league co-founder John Bryant received a temporary injunction prohibiting the league from selling assets, it may be difficult to reach such agreements. The injunction forbade the league from selling its Amarillo and San Angelo franchises to the independent Golden Baseball League and folding operations in Edinburg, Harlingen, Laredo and Alexandria. Bryant and Pierce successfully argued such a move would render their option for a Dallas-area ULB team worthless, causing them financial distress. In addition, Pierce says he’s not been paid monies owed him for the sale of the league (the $60,000 mentioned in the bankruptcy filings). Depositions in the Pierce/Bryant lawsuit were scheduled for last week.

Bryant Pierce obtained a temporary restraining order on August 28 in Dallas County District Court against United Sports Equities. The restraining order forces the league to continue operations pending a further court case, barring any dissolution of assets, the sale of teams or the league, or a merger with another league.

In the temporary restraining order, the court issued the injunction based on a finding that the independent Golden Baseball League was on the verge of purchasing the assets of United League Baseball.

Complicating things is a second lawsuit from Harlan Bruha, the founder and former owner of the San Angelo franchise, who retained a substantial (49 percent) stake in the franchise when the Central League team moved to United League. This lawsuit asks for the United League to return the franchise to Bruha because money was siphoned from the San Angelo franchise to prop up United League Baseball franchises, while failing to make scheduled payments to Bruha.

Amarillo and San Angelo were the only two ULB teams to draw more than 100,000 fans this season, and we’re guessing those two franchises carried a lot of financial weight for the entire league.

In the third lawsuit, former ULB owner Byron Pierce in March 2007 called for Wendt to make good on promised payments connected to his buyout of the league. Wendt apparently stopped making payments on a settlement of that lawsuit, forcing Pierce to go back to court to collect the judgment. The order to keep the league intact originally stems from Pierce’s lawsuit, as there’s no way for him to collect on the judgment if the league is liquidated.

RELATED STORIES: San Angelo ballpark foreclosed, going to auction; Legal issues cloud future of United League Baseball; Brownsville pulls public money from new ballpark;