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Prepackaged Plan Amended to Address Unsecured Lenders in Texas Rangers Case PDF Print E-mail
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MLB Club Sales
Written by Maury Brown   
Friday, 18 June 2010 01:21
Lenders Proceeds
Select the image above to see how much
money is going to lenders as part of the
"prepackaged plan" for the Texas Rangers
NOTE: The DIP Facility figure should
read $21.5 million as it increased during
a hearing earlier in the month

An amended version of the “prepackaged” plan for the sale of the Texas Rangers in bankruptcy court was filed on Thursday to address unsecured creditors, such as former Rangers SS Alex Rodriguez. The changes address the addition of interest on the amount owed them.

In a separate summary document filed Thursday, exact details as to how much cash the Greenberg/Ryan group would be paying, the amounts going equity holders, and finally, the gross amount the Hicks Sports Group lenders would receive, was filed.

The total cash amount for the Rangers assets, not including a separate transaction for approx. 154 acres of land around the Ballpark at Arlington is $287.6 million. After debt, such as loans by MLB to allow the club to continue to function while in Chapter 11 are paid first, the lenders will receive a gross amount of $209.1 million. Leading up to the voluntary bankruptcy of the Rangers, the creditors had been steadfast in accepting no less than $300 million.

In a related matter on Thursday, U.S. Bankruptcy Judge D. Michael Lynn, said that the Rangers may continue to use Perella Weinberg Partners as an investment banker and Weil Gotshal & Manges LLP as legal counsel. The US Trustee, the arm of the Justice Department  that has oversight in bankruptcy matters has claimed that there is a conflict of interest in those two firms working with the Rangers given that they had worked with Tom Hicks prior.

“Any further advisements Weil Gotshal feels it should be making should be made one week from today,” Lynn said. He added that if the firm fails to disclose something, it does so “at its own peril.” (Bloomberg Businessweek)

On Tuesday, Lynn is expected to rule on the prepackaged plan. If he rules in favor of the plan, a July 9 confirmation hearing would set the stage for MLB’s 30 owners to approve the sale to the Greenberg/Ryan group shortly thereafter.

The only possible action by the lenders at that stage would be to ask for a stay on the sale. If no stay is granted, the lenders could seek an appeal, but the process of awarding the club to the Greenberg/Ryan group would still occur. Odds of a stay, which would be granted by Judge Lynn, are seen as exceptionally small.

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Maury BrownMaury 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 Forbes SportsMoney blog. 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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