U.S. Bankruptcy Judge D. Michael Lynn heard more objections from creditors regarding the sale of the Texas Rangers to Chuck Greenberg and Nolan Ryan; meanwhile, potential bidders seek more time to arrange financing.
The courtroom drama regarding the sale of the Texas Rangers continues, as U.S. Bankruptcy Judge D. Michael Lynn heard more objections from creditors; meanwhile, potential bidders seek more time to arrange financing.
Talk about multiple agendas at play here. First, the court sealed a motion from creditors to change the bidding process for the Rangers, a process heavily controlled by Major League Baseball. Lynn had agreed to reopen bidding for the Rangers largely based on the MLB guidelines, but creditors objected; their full arguments are expected to be heard today.
That creditors are working with failed bidders for the team is undeniable; the whole process is designed to totally throw open the bidding process and basically cut the MLB guidelines out the window. Now, there are some good reasons why some of the bidders want the MLB guidelines thrown out the window: they’re fairly stringent when it comes to debt ratios and financing. There’s a lot of doubt whether the two other competing bidders can actually meet the MLB debt guidelines — that’s why both are seeking additional capital in the form of Mark Cuban and his deep pockets — and going to the bankruptcy court to seek a new bidding process is really a naked attempt to bypass MLB debt guidelines. It is a case where the interests of the creditors and the competing bidders directly intersect.
Also potentially on the agenda today: the Chase motion to have the new ballpark lease tossed in favor of the original lease. In that lease, the Rangers had put up the Rangers Ballpark in Arlington lease as collateral for a $425 million line of credit from JP Morgan Chase. In 2009, Hicks Sports Group, the owner of the Rangers, allegedly made changes to the lease that transferred the lease directly to the team. The action is tantamount to someone unilaterally transferring ownership of a house and bypassing any liens on the house in the form of a mortgage.
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