On Tuesday, a U.S. bankruptcy judge rendered no decision at a hearing that will determine the outcome in moving the Texas Rangers out of Chapter 11 bankruptcy, but not before making statements from the bench that appeared to side with the Rangers and MLB in their efforts to sell the club to a group of investors led by Chuck Greenberg and Nolan Ryan.

U.S. Bankruptcy Judge Michael Lynn listened to arguments that it was irrelevant whether creditors could garner more money if the process was opened back up to allow former bidder Jim Crane back into the mix.

Martin Sosland, a lawyer for the Rangers said after going over details on the bankruptcy code that are based upon the lien against the club, "They're entitled to $75 million, and they go away," Sosland said.

Judge Lynn sided with Sosland saying, "I'm inclined to agree with your position on the maximization of value. At this point, you're ahead on that one."

Roughly midway through the hearing, Lynn said repeatedly that it seemed that holding companies of the Rangers, not the Rangers themselves, should be at the center of any claims by creditors.

In going after the Rangers, as opposed to the holding companies, Judge Lynn said at one point to lawyers for the creditors, "Your horse is dead."

Chuck Greenberg said after the hearing that he was pleased with the proceedings.

“The judge reiterated his belief that the best interests of the Rangers are served by concluding the bankruptcy as soon as practicable,” said Greenberg. “He also restated his intentions to hold a confirmation hearing starting on July 9, and we’re pleased that the timetable that we desire in order to serve the best interests of all concerned, including Rangers fans, is still on target.”

Lynn has set a Tuesday status conference surrounding the involuntary bankruptcy petition filed by creditors against Rangers holding companies, which includes Rangers Equity Holdings, L.P., and Rangers Equity Holdings GP, LLC, both under HSG.

The July 9 confirmation hearing is still in place where concerns surrounding claims of breach of documents, such as claims of improper lease transfer of the Ballpark at Arlington could take place. Lawyers for the Rangers have said that these moves are inmaterial as there is no monetary gains to be had fhough such actions.

Judge Lynn is expected to render a decision next week on the “Prepackaged Plan” by Texas Rangers Baseball Partners, which includes the current owners of the Texas Rangers Baseball Club, and Rangers Baseball Express, the local investor group led by team Ryan and Greenberg is at the center of the involuntary bankruptcy case that is before Judge Lynn. That Plan was reached, without creditor visibility, and claims to remedy all secured and unsecured debt tied to just the Texas Rangers assets. It will be up to Lynn to see if, based upon the Plan, the creditors are impaired in any of the 12 Classes of Claims that are part of the bankruptcy code (see details on the prepackaged plan).

A report by the Star-Telegram adds clarity as to how the process moves forward over the next few days:

Lynn said he would soon permit mail-in balloting by some classes of creditors on the pre-packaged bankruptcy plan that includes the $575 million sale to the Greenberg-Ryan group.

But the federal judge said he could still rule that the lenders were not damaged by the bankruptcy, rendering the vote meaningless. Attorneys said voting could be as early as next week.

If Judge Lynn finds that there are no Class impairments, the creditors in the case would have no voting right to block the Prepackaged Plan.  At that point, they could move to appeal the case to a federal court within the district, but any appeal would become "moot" as Texas Rangers Baseball Partners can still consummate the sale/Plan over an appeal. The only way for the creditors to prevent that from happening wuld be by having the judge issue a stay on the Plan, but that action is seen to be rare.

RELATED CONTENT:

• Inside the Texas Rangers Bankruptcy Hearing
  
• Greenberg-Ryan Group Could Receive $10M If Other Bidders Land Texas Rangers
  
• Archive of Documents Surrounding Texas Rangers Bankruptcy
  

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 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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UPDATE (4:51pm ET) - In a "Closing Bell" report on the Sports Business Daily, Bill Siegel, a bankruptcy attorney with Cowles & Thompson, suggested that if Judge Lynn sides with the Rangers, but sees that the holding companies of the Rangers, such as Hicks Sports Group, could be a more correct target, an emergency filing to stay on the sale to a nearby federal district court

UPDATE (4:10pm ET) - Judge Lynn says to the creditors regarding going after the Rangers instead of Hicks Sports Group, the holding company of the Rangers, "Your horse is dead." (via Kaplan tweet)

UPDATE (4:00pmET) - Judge Lynn says at today's bankruptcy hearing that the creditors have better argument against Hicks Sports Group, than the Rangers, itself.

UPDATE (3:35pm ET) - Daniel Kaplan of the SportsBusiness Journal is live tweeting the hearing. One example... Judge Lynn says, "The Rangers need to be out this room just as soon as possible." Such a comment would seem to lean toward approval of the prepackaged plan. But, as has been the case many times before, matters can change over the course of a long day of arguments.

UPDATE (3:30pm ET) - As we outlined below, the creditors filed correspondences around Jim Crane having a better offer for the Rangers, but that the dates of the emails were before the Greenberg/Ryan group entered into an exclusive negotiating window, and from that point the offer bid increased. Lawyers for MLB ripped the creditors for the Exhibts saying, "In any case, the only concrete negotiations that did take place after December 15 -- as indicated by the very e-mails the Lenders cite -- produced an improvement in Baseball Express's already winning bid," MLB said in Monday's filing.

UPDATE (3:15pm ET) - According to Daniel Kaplan of the SBJ (via Twitter), "Judge in Rangers bankruptcy case says he seriously doubts he will appoint a trustee to find other offers for the team."

UPDATE (3pm ET) – The Associated Press is reporting that during arguments being made by lawyers for the Texas Rangers that “U.S. Bankruptcy Judge D. Michael Lynn said he tended to agree with the Rangers' argument, saying there were ‘considerations behind (financial) value that will play a role’ in the sale.”

In what could be related news, the SportsBusiness Journal is reporting that a court-ordered mediation session scheduled for Thursday between the Rangers interests and the creditors for Hicks Sports Group has been canceled.  As reported by Daniel Kaplan, “Why the mediation has been canceled is unclear, though it could mean the judge realizes the results of the hearing will be decisive enough to render mediation moot.”

Lawyers for the creditors of the Rangers will make their arguments later in the day.

More information as it becomes available

Class(es) Are In Session

A “prepacked plan” is designed to address outstanding debt in a Chapter 11 proceeding by having the reorganization prepared in advance. In the normal course of events, this is done with cooperation of the creditors to help expedite matters, and get the distressed company out of Chapter 11 as quickly as possible.

But that’s not the case with the Texas Rangers.

The debtor, in this case Texas Rangers Baseball Partners, which includes the current owners of the Texas Rangers Baseball Club, and Rangers Baseball Express, the local investor group led by team president Nolan Ryan and Chuck Greenberg, is saying that based upon technicalities within the bankruptcy code, all debt to the creditors of the Rangers will be satisfied, and therefore have no vote to reject the prepackaged plan. The case will be made by lawyers for TRBP that 12 Classes of Claims are “unimpaired” and therefore, the creditors have no voting rights to block the sale to the Greenber/Ryan group.

(See the prepackaged plan for the Texas Rangers)

Those 12 classes are:

• Class 1 - Priority Non-Tax Claims
• Class 2 - First Lien Holder Claims
• Class 3 - Second Lien Holder Claims
• Class 4 - MLB Prepetition Claim
• Class 5 - Secured Tax Claims
• Class 6 - Other Secured Claims
• Class 7 - Assumed General Unsecured Claims
• Class 8 - Non-Assumed General Unsecured Claims
• Class 9 - Emerald Diamond Claim
• Class 10 - Overdraft Protection Agreement Claim
• Class 11 - Intercompany Claims
• Class 12 - TRBP Equity Interests

On the flip side, lawyers for the creditors will argue that they are impaired, and thusly, deserve the right to vote whether to approve the deal. For example, they will challenge Class 1 and 2. In a joint brief by the creditors, they claim, “Payment in full does not leave a class of claims unimpaired if material defaults or covenant breaches under the contract governing such claims remain uncured. The Debtor’s apparent contention to the contrary is incorrect as a matter of law.” They then go on to add:

Because the Debtors insist that there are no other impaired classes of claims under the Plan, in order to comply with section 1129(a)(10) of the Bankruptcy Code and confirm the Plan, the Debtor will need an affirmative vote of either Class 2 or Class 3. See 11 U.S.C. §1129(a)(10). As the Lenders will vote to reject the Plan, the Plan is patently unconfirmable.

If Judge Lynn agrees with the creditors, then the prepackaged plan will not be approved, and with it, the process changes.

Opening Up the Bidding

If, at the end of the day, Judge Lynn rules that the creditors are indeed impaired, the creditors will make an argument that there are better offers out there for the Rangers, namely through Houston businessman Jim Crane. Since it is the duty of the bankruptcy court to try and satisfy as much of the debt as possible, Judge Lynn is likely to hear that the process became “closed” when HSG entered into an exclusive agreement for the sale of the club assets to the Greenberg/Ryan group through what is called an Asset Purchase Agreement (APA).

Lawyers for the creditors will show examples of emails between correspondence between Glenn West, legal counsel to HSG, and a lawyer for J. P. Morgan, the creditors’ representative. In one correspondence West writes, “Crane now has a clearly superior economic deal — and may always have had based on Greenberg’s current position.”

At issue will be whether the timeframe of the emails makes them relevant. The majority of correspondence regarding a more lucrative bid by Crane comes before the January 23 Asset Purchase Agreement was reached. From that point, HSG continued to leverage the Greenberg/Ryan group into increasing their offer.

On Friday, TRBP filed a Brief saying:

“TRBP entered into the APA with the best bidder for the Texas Rangers franchise, that is, the bidder that offered the best combination of price and least execution risk. Although the Lenders may speculate that there is a bidder that will pay marginally more for the Texas Rangers franchise, such a bidder faces significant execution risk, including (1) negotiating an acceptable asset purchase agreement; (2) reaching agreement with any non-debtor that will contribute assets as part of the asset purchase agreement; (3) a potential uphill battle to obtain MLB consent (or litigation with MLB regarding its consent rights); and (4) potentially greater financing uncertainty than the Purchaser.”

Judge Lynn will need to weigh whether opening up the bidding truly extracts the most for the creditors with the least risk.

The 800lbs Gorilla in the Room: Consent Rights

Looming over the entire case is whether sports leagues have the right to select bids for franchises that may offer less money to creditors in cases where they have fallen into bankruptcy. The final hurdle in nearly every instance by sports leagues is majority vote that approves ownership transfer.

In the case of the Rangers, 75 percent of the league’s 30 owners must approve the transfer, and in regards to the Texas Rangers, they have solidly backed the Greenberg/Ryan group over Jim Crane due to the makeup of the Greenberg/Ryan group, as well as the fact that Crane backed out of the sale of the Houston Astros several years ago at the 11th hour.

In a worst case scenario, Judge Lynn could open up the bidding process, and through a court controlled sale, find Crane to have a better offer to satisfy the creditors. Major League Baseball will see matters differently, and reject the sale based upon wishing to have, what they see as better stewards of the Rangers, as well as owners that will better represent league interests on other matters that effect the whole of the league.

If MLB rejects the sale based on consent rights, the Rangers sale will become a landmark case that will move forward in the courts challenging league rights as to who they wish to have as part of their ownership ranks.

There have been two precedent setting sales that bolster MLB’s position.

In 2002, MLB sold the Boston Red Sox to a group headed by then Florida Marlins owner John Henry for $700 million and approved by the Jean R. Yawkey Trust. In that sale, both Miles Prentice and Charles Dolan offered up higher bids ($755 million by Prentice and $750 million by Dolan). Controversy ensued as to whether the sale garnered the most for the Trust, and whether the Henry group received favorable consideration to allow Jeffery Loria to sell the Montreal Expos to MLB, and then purchase the Marlins from Henry.

More recently, the NHL Phoenix Coyotes were placed into bankruptcy by owner Jerry Moyes. In that instance, Moyes partnered with Canadian billionaire Jim Balsillie who had designs on purchasing the club and relocating them to a suburb of Ontario, Canada for $242.5 million, while the NHL was offering $140 million, a fraction of that to keep the club in Arizona. In this case, the bankruptcy judge “punted” on his ruling rejecting both the Balsillie offer and a counter offer by the NHL.

As Judge Baum wrote of the Coyotes bankruptcy case, “Generally it is relatively easy to determine how to adequately protect economic interests. In this court’s view, determining how to adequately protect non-economic interests, particularly the interests claimed here by the NHL is exceedingly more challenging... The very nature of professional sports requires some territorial restrictions in order to encourage participation in the venture and to secure to each venturer the legitimate fruits of that participation.”

In his conclusions Baum wrote:

“[T]he court can not approve the bids by (Balsillie) and the NHL. Therefore, (Balsillie's) bid is denied, with prejudice because the interests of the NHL can not be adequately protected as required by Section 363(e) if the sale to (Balsillie) were approved. The NHL’s bid is denied, without prejudice. As stated…, the NHL can probably cure the defect in its bid if it elects to make the required amendment(s)”

The sale eventually moved to the NHL.

"Once that bid [by Balsillie] was rejected, this (the NHL's) bid became the new reality," said Steve Roman, a spokesman for Moyes.

In terms of the Texas Rangers, there is no relocation in play. Judge Lynn would need to look at how league consent, by itself, factors in.

When Will Judge Lynn Rule?

Expect the hearing today in Ft. Worth to go well into the night. While it is possible that Lynn will make a ruling this evening, it is more likely that it will be made on Weds.

RELATED CONTENT:

• Greenberg-Ryan Group Could Receive $10M If Other Bidders Land Texas Rangers
  
• Archive of Documents Surrounding Texas Rangers Bankruptcy
  

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 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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The investment group headed by Pittsburgh sports attorney Chuck Greenberg and Hall of Fame pitcher and current president Nolan Ryan could receive as much as $10 million if they are not approved as owners in the sale of the Texas Rangers, according to court documents filed. The information from the filings was first reported in Monday’s edition of the SportsBusiness Journal.

As noted in the report, creditors of Hicks Sports Group, the holding company for the Rangers, would surely contest the breakup fee, while the Greenberg/Ryan group will contend that the amount covers the expenses tied to fighting the legal battle they are currently in the midst of -- costs no other bidders would need to absorb.

Tomorrow, U.S. Bankruptcy Judge D. Michael Lynn will hear arguments on whether a “pre-packaged plan” by the Greenberg/Ryan group might be accepted, or whether the bidding will open up and allow other potential owners such as Houston businessman Jim Crane, to engage in bidding for the club. The creditors have contended that Crane has a better offer on the table, while the Greenberg/Ryan group contends that based upon MLB approval, and bid price. In a separate filing, the Greenberg/Ryan group (Rangers Baseball Express) contends that “[Crane] will pay marginally more for the Texas Rangers franchise, such a bidder faces significant execution risk, including (1) negotiating an acceptable asset purchase agreement; (2) reaching agreement with any non-debtor that will contribute assets as part of the asset purchase agreement; (3) a potential uphill battle to obtain MLB consent (or litigation with MLB regarding its consent rights); and (4) potentially greater financing uncertainty than the Purchaser.”

The Brief in Opposition by the creditors, dated 6/11/10 shows:

On May 23, 2010, TRBP and the Greenberg Group terminated the January APA and immediately executed a new agreement (the “May APA”) that provides for materially worse terms for TRBP as compared to the January APA, including (1) a $10 million termination fee payable to the Greenberg Group if the transaction does not close (both agreements provide for only a $1.5 million deposit by the Greenberg Group if it cannot close); (2) a reduction in cash payable by the Greenberg Group; (3) a $30 million escrow for a one-year period (despite the Greenberg Group’s offer to reduce the escrow to $15 million for nine months in the April 2 proposal), as well as changes to make it easier for the Greenberg Group to claim against the escrow; and (4) substantially increased reimbursement for fees, including those incurred by BRE, which were not previously required.

The Brief also contends that the lease for Arlington Stadium was transferred improperly from Rangers Ballpark LLC to Texas Rangers Baseball Partners (the current ownership of the Rangers) “for no consideration.” The Brief adds that, “Such transfer was effectuated without an approval of the Collateral Agent, who was the only entity capable of granting such approval.”

The transaction from the Greenberg/Ryan group would keep Tom Hicks on as Chairman Emeritus holding a 1 percent minority stake in the Rangers. According to the filing, “Mr. Hicks would receive a one percent stake in the Texas Rangers, approximately $58 million, as well as ‘certain perquisites . . . customary to former owners . . . of professional sports teams’ including season tickets and parking passes, and the title of Chairman Emeritus for three years.”

An interesting point in the Brief outlines how much in initial payments the Greenberg/Ryan group would offer as part of the January 23, 2010 Asset Purchase Agreement (APA). While this figure has since changed over the course of the exclusive negotiating window with the group, it gives insight into how much cash would have been involved, if the APA had come to fruition without the legal snarlings that the Rangers are now in the midst of with the voluntary Chapter 11 bankruptcy proceedings.

The January APA paid the Lenders approximately $231 million cash at closing, with $30 million to be held in escrow (which might only become available to the First Lien Lenders more than a year after closing).

Along with the sale of the Rangers, a separate land transaction for approx. 154 acres of land surrounding the Ballpark is also in play with the Rangers sale. The sale price for the land was not made available to the public, but with the filing, details from the 1/23/10 APA shed some light on how much the Greenberg/Ryan group would be offering, as taken from the point of view of the Brief in Opposition by the Lenders:

Pursuant to the Land Sale Agreement, BRE agreed to sell its right, title and interest in certain real property surrounding the Ballpark at Arlington (the “BRE Property”). BRE stood to receive the following consideration in connection with the Land Sale Agreement: (i) $5,000,000 of cash, (ii) a $53,158,991.04 promissory note paying interest of 4.1% per annum, (iii) a 1% equity interest in Rangers Baseball Express, (iv) forgiveness of a $12,800,000 debt owed to Emerald Diamond, L.P. (“Emerald Diamond”), a guarantor under the Credit Agreements and (v) assumption of certain liabilities associated with or related to the BRE Property, and (vi) repayment of the Overdraft Protection Line of Credit.

Finally, for some time it was reported that the creditors saw a large gap that was preventing the deal from gaining full approval of the 40 creditors, with lead creditors Monarch Alternative Capital being the stumbling block. Reports had $270 million being offered while the creditors remained steadfast in saying they would accept no less than $300 million, a $30 million gap.

The Brief in Opposition adds that after the 1/23/10 APA was reached, the Greenberg/Ryan group continued making adjustments that would have gotten the gap to just $18 million.

On April 2, 2010, HSG and the Greenberg Group made an informal proposal (not reflected in any executable documents) regarding certain improvements to the January APA, which MLB calculated as providing $282 million of value to the Lenders. Although this was higher value to the Lenders, most of the improvements were economic concessions made by Hicks and his affiliates.

More news tomorrow as the hearing takes place. Expectation is that a ruling by the judge in which the process could be opened up to other bidders, or the "pre-packaged" plan could be approved. That ruling could take place late Tuesday, but most likely Weds. morning. If Lynn rules in favor of the Greenberg/Ryan group offer, the final approval of the "pre-packaged" plan by the group would occur at a seperate hearing on July 9th.

If the judge were to open the bidding up, it is expected to be a major legal challenge as to how sports leagues can select who can, or cannot, be owners, irrespective of bid price.

RELATED CONTENT:

• Archive of Documents Surrounding Texas Rangers Bankruptcy
  

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 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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On Tuesday, a hearing could determine whether a “pre-packaged” plan by group of investors headed by Chuck Greenberg and Nolan Ryan will be approved by a bankruptcy judge, or whether the process will be reopened to other bidders, namely Houston businessman, Jim Crane.

The contention of creditors for Hicks Sports Group, who is the holding company for the Texas Rangers, is that Crane has had a better offer on the table than the Greenberg/Ryan group (Texas Rangers Baseball Partners) that would help absorb part of HSG’s $525 million in debt.

That contention was elevated in the press late Friday when The New York Times ran an article outlining correspondence between Glenn West, legal counsel to HSG, and a lawyer for J. P. Morgan, the creditors’ representative, saying, “Crane now has a clearly superior economic deal — and may always have had based on Greenberg’s current position.”

The article then goes on to say:

But Major League Baseball told H.S.G. that it had “our permission to negotiate only with the Greenberg group,” the filing says. In response, West wrote on New Year’s Eve to Thomas Ostertag, M.L.B.’s general counsel: “It appears Greenberg is using your position to simply refuse to negotiate in good faith; and the result will be a bad one for the team and our lenders (whose consent is absolutely required, just like yours, for whatever is ultimately done here).”

[...]

The creditors’ filing says that Crane’s offer was worth $13 million to $20 million more than the Greenberg-Ryan bid and that Crane told H.S.G. and M.L.B. that he would have gone still higher.

The key to the correspondence centers on the time in which the exchange occurred: December and mid-January. Why is the timeframe significant? Tom Hicks selected the Greenberg/Ryan group shortly thereafter and entered into an Asset Purchase Agreement (APA) that allowed the group to enter into an exclusive negotiating window where it is believed that the group increased their offer -- more than once -- during that window.

So, the question for the judge will be, is the correspondence cited by the creditors relevant?

On Friday, TRBP filed a Brief saying:

“TRBP entered into the APA with the best bidder for the Texas Rangers franchise, that is, the bidder that offered the best combination of price and least execution risk. Although the Lenders may speculate that there is a bidder that will pay marginally more for the Texas Rangers franchise, such a bidder faces significant execution risk, including (1) negotiating an acceptable asset purchase agreement; (2) reaching agreement with any non-debtor that will contribute assets as part of the asset purchase agreement; (3) a potential uphill battle to obtain MLB consent (or litigation with MLB regarding its consent rights); and (4) potentially greater financing uncertainty than the Purchaser.”

On the 15th in a Ft. Worth courtroom, U.S. Bankruptcy Judge Michael Lynn will hear arguments on the “pre-packaged plan”, that would allow for the Rangers to emerge from voluntary Chapter 11 bankruptcy with July 9th being the possible date that Lynn could rule to allow the transfer of the Rangers ownership to occur between HSG and TRBP, or whether the process is opened back up, thus allowing for Jim Crane to engage in the bidding process.

RELATED CONTENT:

• Archive of Documents Surrounding Texas Rangers Bankruptcy
  

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 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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Late yesterday, the creditors for the Texas Rangers worked procedural channels and pushed two holding companied under Hicks Sports Group, Rangers Equity Holdings, L.P., and Rangers Equity Holdings GP, LLC, into involuntary bankruptcy.

The petition was filed by several of the 40 primary and secondary lenders, including Monarch Alternative Capital. A statement, released through Perry Street Communications for the lenders, said, “Today's procedural developments, which were discussed as possible actions in Court on May 25, 2010, are intended to ensure that the bankruptcy proceedings meet the objective of maximizing value for all creditors.”

Texas Rangers Baseball Partners, by way of Kekst and Company, released a statement saying:

“The unsurprising action taken by the creditors involves holding companies that conduct no commercial business and have no employees or operating assets. It is nothing more than jockeying for position in an orderly process that was initiated on May 24th.  Following the court’s orders, the Rangers are conducting normal baseball and business operations and, importantly, the court has set a schedule that is consistent with our objective of completing the sale of the Rangers to the Greenberg-Ryan group by mid-summer. We do not believe this action by the creditors will affect that schedule.”

On Monday, Texas Rangers Baseball Partners, the current owners of the Texas Rangers Baseball Club, and Rangers Baseball Express, the local investor group led by team president Nolan Ryan and Chuck Greenberg, filed a petition to move the Rangers into voluntary bankruptcy in an effort to push through the$575 million sale of the Club and its lease of the Rangers Ballpark in Arlington, together with the separate sale of 154 acres of land around the Ballpark. The efforts, through a “pre-packaged” plan, is said to be designed to pay any secured and unsecured debt surrounding the Rangers assets.

(See the details of the “pre-packaged” plan filed as part of the voluntary bankruptcy proceedings)

In related news, the Rangers came close to missing operational payroll, something that has reportedly happened prior, but not since the Rangers have been locked in a stalemate with key creditors, Monarch Alternative Capital, Kingsland Capital Management, Sankaty Advisors and Galatioto Sports Partners, over the $575 million bid by a group led by Chuck Greenberg and Nolan Ryan to purchase the Rangers from current owner, Tom Hicks.

The Dallas Morning News first reported that John Blake, the public relations representative for the Rangers said Friday that “paychecks were cut and distributed. The club had been $3.8 million shy of the amount needed to meet payroll, he had said earlier. The overall total paid out was not released.”

According to sources close to the Rangers, the on-going process surrounding the bankruptcy is expected to have no impact on Rangers operations, including paying employees in the normal course of business. The court orders authorized earlier this week provide for pay to employees and use of the new $21.5 million credit facility provided by Major League Baseball.

RELATED CONTENT:

• Archive of Documents Surrounding Texas Rangers Bankruptcy
  

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 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.

Follow Maury Brown on Twitter

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