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From Alex Rodriguez to the MLBPA, Objections Fly in Texas Rangers Case PDF Print E-mail
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MLB Club Sales
Written by Maury Brown   
Thursday, 29 July 2010 14:55

Texas RangersHere come the objections in the Texas Rangers bankruptcy case to the current amended “pre-packaged plan”. With the filing deadline for objections fast approaching, a litany of interests are setting law firms into action.

Alex Rodriguez, who, being Alex Rodriguez and the largest unsecured creditor (see the list of the 30 largest unsecured creditors), filed his own objection to the plan seeking verbiage within the plan that guarantees he receives his $24,892,061.62 in deferred compensation. In doing so, A-Rod is, more or less, doing his own bit of “double lawyering” as the committee for all the unsecured creditors have filed objection to the plan based upon written guarentees. That would cover the likes of other Rangers players such as Kevin Millwood, Michael Young, Vicente Padilla, Mickey Tettleton, and Mark McLemore, but lalso businesses such as Tickets.com, Rawlings, New Era Caps, and hundreds more.

Judge Michael Lynn has ruled prior that based on the bankruptcy code the class of unsecured creditors are deemed to be “unimpaired”, so it is unclear how the judge would rule on the objections. However, it is possible thatother bidders at auction on Aug 4 outside of the group led by Chuck Greenberg and Nolan Ryan may not agree to pay the unsecured creditors, Lynn may now seek to have concrete verbiage added to the prepackaged plan that other bidders will mark up for consideration by the judge, should they win at auction.

While Alex Rodriguez may be grabbing the headlines due to star power, an objection by MLBPA may have more relevance. The union conditionally supports the sale, but is looking to protect the pay of players on the Rangers roster.The union for the players is objecting to plan, as well, citing the need to repay the Rangers players owed deferred compensation, but also guarantees that money in escrow to cover deferred compensation is covered in the future, citing the unitform player contract within the collective bargaining agreement. The section citied, with emphasis added reads:

In all instances of the sale, trade, exchange or other change or transfer in the ownership of a franchise, all obligations owed to present or former Players arising under a Uniform Player’s Contract shall be the obligation of the new ownership of such franchise.

The filing adds, “The Association wishes to see a prompt transfer of the Rangers’ baseball franchise to viable new ownership” adding that For the reasons expressed by Rangers President Nolan Ryan and Manager Ron Washington … an expeditious sale of the Rangers is essential for the reinvigoration of the franchise and the morale of the Club.”

Most important, the MLBPA argues that, “Approval of a transaction that does not comply with the Basic Agreement would violate the provisions of the Bankruptcy Code prohibiting a unilateral termination or modification of the terms and conditions of a labor agreement.”

While there has been numerous accounts of the league being able to have powers through its constitution that regardless of the highest bidder at auction, MLB has the right to approve ownership transfer of the franchises, the MLBPA also sees the right to have powers to approve ownership. The filing adds, “The Association also reserves its rights in the event multiple bidders participate in the auction and there is a dispute before this Court as to which bidder should be approved.”

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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 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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