Cuck Greenberg enters the courthouse in Ft. Worth prior to yesterday's auction
of the Texas Rangers (AP Photo/Cody Duty)
UPDATE (12pm CT): Add info on Ballpark lease lawsuit being dropped, MLBPA removing objection, projected date for ownership transfer to occur.
At nearly 1am this morning, the investor group of Chuck Greenberg and Nolan Ryan won the auction for the Texas Rangers after the group led by Dallas Mavericks owner Mark Cuban and Houston businessman Jim Crane conceded after the Greenberg/Ryan group had a cash offer of $385 million.
Now, a confirmation hearing is taking place with Judge Michael Lynn on the auction process and the pre-packaged plan that the Greenberg/.Ryan group has amended several times, and will likely do so further today during the hearing.
Here’s some info coming out in the early going of the hearing:
Maybe the biggest news has little monitary implications, but has a lot to do with public relations, Nolan Ryan said to 105.3 The Fan, Tom Hicks has been removed completely from any ownership role within the organization. Prior, Hicks was going to be given less than 1 percent ownership equity with Greenberg/Ryan with the ceremonial title of Chairman Emeritus. That has now all been stripped. The reason? According to sources (not Ryan), the title and fractional ownership equity was a nod for the land deal around the Ballpark that was stripped yesterday. When the deal was terminated, so was any cermonial offering to Hicks.
The total assessed value of the deal, including cash and debt obligations totals $593 million, or approx. $73 million they had on the table before the auction started.
The lenders gained approx. $100 million through the process.
Through a good portion of yesterday’s auction, lawyers for the Greenberg/Ryan group claimed that the whole auction process was broken and that the Cuban/Crane bid to start the auction should not be approved. At one stage in a recess, Greenberg said that, depending on the auction outcome, they would appeal. The reason was clarified by Judge Lynn at today’s hearing. Lynn was contacted by the lead Lenders, representatives from Major League Baseball, William Snyder, the Chief Restructuring Officer in the case and the Greenberg/Ryan group about a deal that was in place that would have allowed the auction to not be held (later, Sal Galatioto, a second-lien lender nixed the deal). Afterwards, Clifton Jessup, the attorney for Mark Cuban, called the judge, and at that point Lynn said Jessup knew what Greenberg/Ryan bid was. The parties in the auction were not to know what the others were bidding prior to the auction starting, so the auction process was technically broken at that point. This explains why Greenberg lawyer Thomas Loria objected strenuously late Weds. night during the auction when Jessup said that the Greenberg/Ryan group was stalling on the auction process, saying, “They’ve had 20 hours to look at our bid, while we’ve had an hour and 45 min.”
At the hearing, Judge Lynn said to Jessup, that he thanked Cuban and Crane for bowing out when they did, and that he admitted, the majority of fans got who they wanted. Saying that both were exceptionally gracious after conceding to Greenberg and Ryan.
There will be tweaks to the plan today, addressing concerns by the MLBPA and former Rangers players, such as Alex Rodriguez surrounding deferred compensation owed the players. The MLBPA filed a limited objection to the amended plan that the Rangers have been working on that Greenberg/Ryan would comply to, that asks for, “adequate assurance of future performance within the meaning of Bankruptcy …. and cure of defaults within the meaning of Bankruptcy Code section.” The latter would address current players that are owed deferred compensation while the former would guarantee future money payments that must be set aside in escrow for players that can then be drawn for their deferred compensation. At the hearing, the MLBPA's concerns were addressed. Although Alex Rodriguez filed a separate complaint (which had no value as he is covered under the MLBPA's motion), plater compensation has been addressed.
A huge looming factor has been removed now, as well. The lawsuit by JPMorgan Chase as part of the Ad Hoc committee of lead lenders, has dropped their lawsuit claiming the lease on the Ballpark was fraudulently transferred.
Other tweaks, likely to be procedural in nature, are occurring, but very minor. MLB's legal team has left as has most of the lawyers for the lenders.
The hearing shows that there seems to be no party that will stand up and vote against the plan. The lenders admitted in court that they were very pleased that they did not go forward with the deal the night before the auction that would have killed it. Given the large sum that came out of the bidding process, the lenders have likely gained more than they thought they would.
The expectation now is for MLB to approve the ownership transfer on Aug. 12, with Greenberg and Ryan taking over the club on Aug. 13.
Look for updates over the course of the hearing, and get live updates via Twitter
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 FanGraphs and Forbes SportsMoney. 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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