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.
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