We warned that bankruptcy is never a good thing for a baseball team, and U.S. Bankruptcy Judge Michael Lynn is proving it, ruling that the Texas Rangers will now be sold via auction. Meanwhile, there's talk that Mark Cuban is joining a competing group as an investor — a move that will surely go over well in the commissioner's office.
We warned that bankruptcy is never a good thing for a baseball team, and U.S. Bankruptcy Judge Michael Lynn is proving it, ruling that the Texas Rangers will now be sold via auction. Meanwhile, there's talk that Mark Cuban is joining a competing group as an investor — a move that will surely go over well in the commissioner's office.
Here's the deal. After much negotiation, a group led by sports attorney Chuck Greenberg and Rangers president Nolan Ryan agreed to buy the Rangers from Tom Hicks. Almost immediately some of the Rangers' creditors — in association with Hicks, it appears — raised objections to the sale, saying they'd be left in the lurch. After negotiations with Major League Baseball, the decision was made to place the Rangers into a prepackaged bankruptcy.
That's where the deal started to unravel. As we wrote at the time:
Still, a bankruptcy judge has a lot of leeway to deviate from the prepackaged terms if he or she thinks the lenders are not being treated fairly. The Rangers say the proceeds of the sale will be enough to satisfy the team's debts, which also includes deferred salaries to Alex Rodriguez ($24.9 million) and Kevin Millwood ($12.9 million). And how does Selig come by his knowledge of bankruptcy and baseball? He swooped in and purchased the Seattle Pilots out of bankruptcy court when original owner Dewey Soriano was attempting to restructure the team's debts.
The entrance to bankruptcy court gave a spurned ownership group led by Dennis Gilbert and Jeff Beck the opportunity to swoop and buy the team. The New York Post is reporting that Mark Cuban is investing in the Gilbert/Beck bid as the stakes are raised; others say this isn't true. However, given the hostility shown to Cuban when he bid on the Chicago Cubs, there's reason to think it's not true. And MLB still controls a powerful hand in the deliberations: it must approve any buyer of the team.
The bid from Greenberg and Ryan is pegged at $575 million.
Bids could come next week, with the sale closing July 22.
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