((HT: NYTimes- Sandomir, Belson))
The HQ thinks this is a dangerous game that Major League Baseball is playing with the courts these days where the sale of the Texas Rangers is concerned.
We all know Tom Hicks was hemorrhaging money and wanted to sell. His losses in the soccer world in Liverpool and with the Dallas Stars forced him, like any other smart businessman, to want to restructure his debt load...
Of US$525-million... after he defaulted on those loans...
Here was the story at the time of the default, thanks to our friends at MyFoxDFW
James Rose was outside for the story in April...
So, then the Rangers go up for auction... and the team files for bankruptcy protection back in May.
The group led by Nolan Ryan and Chuck Greenberg agree to a purchase price not once, but twice, and the plan for Hicks was to make sure that his liability was capped at $75-million dollars. That idea, in June, surely, annoyed all Hicks' creditors who feel they're owed closer to US$450-million.
Major League Baseball went even as far as to float a US$40-million loan so the team could make its 2010 expenses- which include paying Cliff Lee.
The whole process is now heading for an August 4th auction, and Mavericks owner Mark Cuban is seen as a possible competitor for Ryan/Greenberg, who have sued Hicks for negotiating behind their back for a better bid.
MyFoxDFW caught up with Dallas attorney Clint David...
And now JP Morgan has jumped in to sue the team for transferring its lease- a violation of loan agreements.
There is a better bid on the table, fully financed, from Houston businessman Jim Crane, but Selig wants nothing to do with the Crane dollars.
And the Commissioner has made it publicly clear he wants the Ryan/Greenberg group and no one else... How far...???
Get this, from the New York Times article:
Selig has blocked Hicks from seeking higher bids, and he has threatened to invoke the “best interests of baseball” clause to accelerate the sale. When Hicks voiced doubts in April about whether lenders would approve the Ryan-Greenberg offer, baseball officials issued a statement later that day affirming that it was running the sale and that Selig would deal “appropriately” with interference from Hicks or anyone else.
One of Selig’s lawyers vowed profanely in a conference call that if the judge did not approve the team’s prepackaged bankruptcy plan, which would have sped approval of the Greenberg-Ryan bid, M.L.B. would terminate the franchise, according to a person on the call.
Selig thinks that he can choose the owners- regardless of financial status or solvency... and ignore the court system...???
What do you think the US Government has to say about that idea...???
TUESDAY UPDATE: A court-appointed official says the August 4th auction should be delayed.
The restructuring officer, William K. Snyder, testified that potential buyers probably wouldn't be able to secure financing by that time. Interested bidders have to come up with at least $500 million.
Snyder suggested that a mediator pick the date after talking to all potential bidders.
The bidding procedures set the Greenberg-Ryan group's offer as the opening bid, but their financing guarantee is set to expire August 12th.
So, if the auction is set past the 12th, Ryan/Greenberg may be out on their ass. That could set in motion the Selig gambit mentioned above, a messy court battle with Hicks' creditors, and a messy court battle with the winner of the auction.
Or Choice D) All of the above...