Bankruptcy judge orders mediation for Texas Rangers and lenders, delaying hearing on team saleBy Angela K. Brown, AP
Thursday, June 24, 2010
Judge orders mediation for Texas Rangers, lenders
FORT WORTH, Texas — A federal bankruptcy judge ordered the Texas Rangers and their angry creditors into mediation Thursday, pushing any resolution of the long-delayed sale dangerously close to a deadline that could be crucial to the team’s playoff hopes.
U.S. Bankruptcy Judge D. Michael Lynn ruled that both sides will meet July 16 to hammer out issues over the Rangers’ bankruptcy plan to pay creditors $75 million and sell the club to a group led by Nolan Ryan, the Hall of Fame pitcher and team president, and Pittsburgh attorney Chuck Greenberg.
Lynn delayed until July 22 a hearing on whether to approve the plan. That hearing, initially set for two weeks earlier, is much closer to the July 31 nonwaiver trading deadline.
The Rangers are leading the American League West and have one of the best records in baseball. A pending sale could affect any trade plans to bolster a pennant run.
Lynn’s order comes two days after he ruled that the Rangers’ ownership and their creditors were adversely affected by the plan. He said that to avoid lenders’ killing the plan, the Rangers would have to restore some of their rights but would not have to give them more money.
The team has said it was confident that those changes could be made and that no lenders could block a revised plan. Now it’s unclear if the Rangers will submit a modified plan before mediation.
“The judge is trying to force both parties to come to an agreement as far as what their issues are and to hash out their major disagreements — not just the small points,” said Jason T. Rodriguez, a Dallas bankruptcy attorney who is not involved in the case.
The Rangers had no comment, said Mark Semer, a spokesman for the owners. Creditors did not immediately return calls Thursday.
Since the team’s sale was announced in January, it has been stalled by creditors’ concerns over the financially strapped Hicks Sports Group.
“We’ve been at this for five months … and couldn’t get there,” Andrew LeBlanc, an attorney for some of the creditors, told the judge at last week’s hearing.
Creditors have argued that the team doesn’t just owe $75 million, but is obligated to pay more than $525 million in loans that team owner Tom Hicks’ ownership group defaulted on last year. Creditors also have argued that the Greenberg-Ryan bid — which Major League Baseball endorses — was not the highest.
If the issues cannot be resolved during mediation, it’s unclear if the judge would allow any party to vote on the plan. The judge’s ruling earlier this week allowed two groups of creditors and the team ownership to vote — although avoiding a vote seemed to be his goal in suggesting that the Rangers modify the plan.
Creditors have said they would vote against the existing proposal. If a vote is allowed, the only way the team’s plan could be saved is if one of the creditors’ groups approved it, according to a bankruptcy code.
If the Rangers revise their plan and the judge rules that the creditors are no longer adversely affected, they would not be allowed to vote on it. Then the judge would decide whether to approve the plan based on certain bankruptcy code requirements.
Even without a vote, creditors could try to block the plan by saying it was filed in bad faith and therefore violates bankruptcy codes. The filing removed creditors’ rights to approve the team’s sale.
Tags: Fort Worth, North America, Ownership Changes, Professional Baseball, Sports Business, Texas, United States