Bankruptcy judge sets Aug. 4 hearing for Texas Rangers after contentious hearingBy Angela K. Brown, AP
Tuesday, July 13, 2010
Judge sets Aug 4 auction of Texas Rangers
FORT WORTH, Texas — A federal bankruptcy judge decided Tuesday that the Texas Rangers will be auctioned off after all, despite angry creditors’ claims that the bidding process is unfair and still favors Major League Baseball’s preferred buyer.
U.S. Bankruptcy Judge D. Michael Lynn set the auction for Aug. 4 after changing some of the team’s proposed bidding procedures, citing a “need to bring order from chaos.” The final hearing on whether to approve the Rangers’ bankruptcy plan was set for later that day.
After the auction, Major League Baseball will still be able to reject the highest bidder and approve the next highest bid — something lenders opposed. But if that happens, the judge can determine if the league acted in good faith, according to the revised procedures.
Months ago the league gave its blessing to a group led by team president and Hall of Fame pitcher Nolan Ryan and Pittsburgh sports attorney Chuck Greenberg, selected as the buyers after a bidding process last year.
But because angry creditors stalled the sale over financial concerns, the team filed for Chapter 11 protection in May with a plan to repay lenders $75 million and sell the club to Greenberg and Ryan’s group.
Although lenders said that bid was not the highest and the court-appointed chief restructuring officer recommended a new round of bidding, only the team and the Greenberg-Ryan group pushed for the auction Tuesday.
Attorneys for the creditors and restructuring officer said they no longer supported an auction because the bidding procedures and timetable would limit a potential buyer’s ability to secure financing. They also said Major League Baseball still wants the Greenberg-Ryan group.
“He doesn’t believe anybody’s going to show up and bid,” said attorney Louis Strubeck, referring to the restructuring officer, William K. Snyder.
But Sandy Esserman, an attorney for Major League Baseball, said it has already approved two other bidders — Houston businessman Jim Crane and Dallas investor Jeff Beck — both part of failed bid attempts last year. The league also will “jump through hoops” to get any other potential bidders qualified based on financing, Esserman said.
He added that commissioner Bud Selig’s previous comments about ensuring the team’s sale to the Greenberg-Ryan group were made before the league fully understood its role in a bankruptcy case.
The judge did allow more time for bidders by setting the auction for Aug. 4, two weeks after the team’s proposed date. But Lynn said he wanted it held before Aug. 12, when the Greenberg-Ryan group loses its financing guarantee.
Andrew LeBlanc, an attorney for the top lenders, questioned the urgency of the team’s sale. He said the Rangers initially wanted the team sold and bankruptcy case wrapped up before July 31, the nonwaiver trading deadline.
“But no sooner had we walked out of here Friday (after a closed-door meeting) than the Rangers had traded for the best pitcher in baseball,” LeBlanc said.
On Friday, the American League West-leading Rangers acquired ace left-hander Cliff Lee from the struggling Seattle Mariners in a trade deal.
Tuesday’s hearing came a day after the Greenberg-Ryan group, Rangers Baseball Express, filed a lawsuit seeking to force the long-delayed sale and stop negotiations with other interested parties.
But Thomas Lauria, the group’s attorney, told the judge Tuesday he would not argue for that suit if some bidding procedures and other issues could be resolved. He said his clients’ only goal was to buy the team.
Lauria also said the cash portion of his clients’ bid was now $306.7 million, a $2.7-million increase, after it decided not to renew the team’s aircraft lease.
In the revised procedures, starting bids must be at least $15 million higher than the cash portion of the Greenberg-Ryan bid, which totals about $575 million and includes paying the full $204 million owed to unsecured creditors. Topping the list of unsecured creditors is New York Yankees star Alex Rodriguez, who is owed $24.9 million in deferred compensation six years after he was traded.
Tags: Fort Worth, New York, New York City, North America, Ownership Changes, Professional Baseball, Sports Business, Sports Transactions, Texas, United States