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As expected, the creditors are objecting to the Rangers bankruptcy plan

May 26, 2010, 10:35 AM EDT

The first hearing was held in the Texas Rangers bankruptcy yesterday.  As I presumed might happen, the creditors to Hicks Sports Group spoke up and objected to the Greenberg-Ryan sale, insisting that baseball “fast-tracked” the team’s sale to a lower bidder and that “there’s a better bid out there.”

There will be a lot happening in the bankruptcy case because, as we established on Monday, bankruptcy is really friggin’ complicated.  The creditor’s objection, however, is the thing to watch, because it’s the thing that could derail the sale as currently constructed.

With the usual caveat of “please let me know if I’m wrong about this, bankruptcy experts,” the upshot of what is going to happen now is that the judge will hold a hearing as to whether, in fact, there is a better deal for the creditors* out there, and if he finds that there is, he will repoen the bidding, allowing in Jim Crane, Dennis Gilbert, you, me and anyone else who wants to buy the Rangers to bid again. The hearing is set for July 9th.

The inquiry about whether a better bid exists isn’t merely a price comparison however. For example, it’s quite possible that the Crane and Gilbert bids are no longer operative and Greenberg is the only game in town. It’s possible that, even if they are operative and had higher sales prices that their terms for the creditors were no better and in fact worse than Greenberg’s.

What I’m saying here is that just because we’ve heard reports that Greenberg wasn’t the high bidder doesn’t mean that the bankruptcy court will put the kibosh on this deal. Indeed, in filing this bankruptcy the Rangers — no doubt in consultation with Greenberg — knew that this analysis would likely happen and felt confident enough about their chances to go through with it.

We’ll know if this was a good gamble some time after July 9th.

*Until now all decisions on the sale have been between the Rangers, the Greenberg Group and Major League Baseball.  In the usual order of things that’s fine — they can decide to do what they want to do, and if the Rangers want to take a lower bid they can.  Once the team goes to bankruptcy court, however, the law mandates that the best interests of the creditors — and not just the best interests of the owner of the bankrupt business — reign supreme. 

  1. Okobojicat - May 26, 2010 at 10:41 AM

    Wouldn’t be the best option for a community purchase of the team we could ever construct?
    We could select someone to represent Ownership: (Craig the Lawyer)
    The GM (Aaron the man who makes up fake stats GPA http://en.wikipedia.org/wiki/Gross_Production_Average
    I’ll do minor league scouting beer tasting. I know its a hard job, but someone has to do it.
    Anyways, I’ll throw in a $1000. I figure we need $400m so let’s get cracking.

  2. Howell - May 26, 2010 at 10:51 AM

    I know Mark Cuban is having his own issues with his ownership group right now, but wouldn’t this be the perfect way for him to swoop in and get a baseball team?

  3. RobRob - May 26, 2010 at 11:31 AM

    I’m curious how this compares/contrasts to the GM bankruptcy from last year. Weren’t there creditors who objected to that “prepackaged” filing as well?

  4. 3LT - May 26, 2010 at 11:35 AM

    Thanks a lot Craig. Just three days after graduation and you’re already reminding me of creditor rights in bankruptcy. What next, a run-down of American Needle and how it will affect the limited antitrust exemption baseball currently enjoys? Maybe you could just post the CBA (as you did on shysterball once) for some doc review practice before I (along with other recent grads) line up outside the courthouse like immigrant workers waiting for a van to pull up. I’d tell you to go to hell, but you have apparently escaped to lead the good life getting paid to write about a game. At least I assume you’re getting paid…

  5. dlf - May 26, 2010 at 11:48 AM

    What I liked about the filings was the team’s request that it not be required to file a full disclosure statement because, they claim, there are no impaired classes of creditors so they shouldn’t be required to divulge their assets and liabilities.
    The US Trustee has objected to payment of non-players (e.g. Nolan Ryan in his role as President) but has not objected to payment of players or obligations to members of MLBPA. They pointed out that it appears that Hicks Sports Group may hold the television contracts as a separate entity from the Rangers themselves. More revenue sharing shenanigans …
    Its times like this when I really miss Doug Pappas.

  6. The Rabbit - May 26, 2010 at 4:15 PM

    Hey Len,
    I have a Powerball ticket for tonight. We can put in a bid if I win, but I’d rather hold out for a National League team.
    The Dodgers should be available by the time the check clears and I’ve set up multiple corporations to hide assets to fit in with the other owners.
    recaptcha: its jingling (a sign?)

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