Interesting. According to a lawsuit filed Monday in the Dallas area, the former owner of the Texas Rangers, Tom Hicks, is being sued by the team's post-bankruptcy administrator.
According to a story in the Fort Worth Star-Telegram, the suit charges Hicks with misdirecting at least $30.5 million from the team to Hicks's real-estate business.
This all has something to do with Hicks purchasing parking lots next to his former team's stadium in Arlington and a lot next to Cowboys stadium. That purchase apparently caused the team to not pay some deferred compensation for players, which they are required to do.
It's a bit confusing, so read the original story RIGHT HERE
For his part, Hicks denies the charges and says they look forward to challenging the allegations in court. ((Note- We are guessing that's the lawyers talking. Right or wrong, they make money if this gets to a courtroom))
As many of you know, Hicks has had some money issues and those problems forced the Rangers into bankruptcy just over a year ago. The team was bought at a bankruptcy auction, which apparently took care of most of his debts.
Strange but true, stories like this never end well. And really, it is just a chance for rich people and rich lawyers to make even more money off of each other.
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...??? Just axin'...
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.
They're not happy with how, essentially, Tom Hicks was still negotiating with other groups after the Greenberg/Ryan group was approved by bankruptcy courts as the one who was going to purchase the club.
Apparently, and rightfully so if true, they're bent at court-appointed Chief Restructuring Officer William K. Snyder who took the bankruptcy case over while bankruptcy court judge D. Michael Lynn was on vacation. Snyder went on to recommend opening up the process to new bids all over again. But, Lynn did come back to rule last week that he intends for the case to be all figured out by July 22nd.
Greenberg and Ryan feel Hicks and the Rangers are in breach of the deal and seek to stop all their alleged shenanigans.
Interesting story developing in the Tom Hicks goes bankrupt and tries to sell the Texas Rangers saga.
According to a couple of published reports, Major League Baseball commissioner Bud Selig is seriously considering using the powers granted to him (I'm not gonna make the joke!) and seize control of the team which would enable the Rangers to then be sold to a group headed by current team President Nolan Ryan and Pittsburgh attorney Chuck Greenburg.
((Tom Hicks//Courtesy: Dallas Observer))
The reason for this is somewhat technical. Apparently creditors who want a piece of Hicks; he owes a lot of people a lot of money...about $525 million all told. Hicks wants to sell the team, but can't agree with his creditors on how much money from the sale will go to them.
It's complicated.
For a more detailed explanation, go to the source of the story, the Bizofbaseball.com RIGHT HERE
This one will be interesting. Aside from the NHL taking over the Phoenix Coyotes for this season, there really haven't been a whole lot of precedents for this. The league did for a time exercise this option with the Montreal Expos to help facilitate the sale to Ted Lerner, so that he could move the team to Washington DC back in 2001.
It's well known that George Gillett and Tom Hicks are hemorrhaging cash through their other ventures- Gillett with his disaster at RPM Motorsports and Tom Hicks with Liverpool, the Dallas Stars, and the Texas Rangers.
These two titans of industry have finally decided to put Liverpool up for sale and have named Martin Broughton, the head of British Airways, as their new Chairman. Gillett and Hicks have consulted with Barclays Financial to get this sale done quickly.
Tom Hicks is willing to give up control of baseball's Texas Rangers if the right deal comes along but he intends to keep the NHL's Dallas Stars.
Hicks said in late March that he was seeking minority investors to purchase up to 49 percent in each club. About a week later, the holding company that owns the clubs, Hicks Sports Group, defaulted on about $525 million in loans. Hicks said he intentionally made the move to help negotiate with banks.
"With the right partners, I would be willing to sell a controlling interest in the Rangers," Hicks said on Thursday in an e-mail to The Associated Press. "Not so with the Stars."
His intentions were first reported by the Fort Worth Star-Telegram. That article, by Randy Galloway, is right here...
His key paragraphs:
"What was "adamant" in early spring doesn’t necessarily apply in late May. And for someone in Hicks’ financial circles, things change as much as the ups and downs of a depressed national market. (This will be, promise, my final comment on all things listed under economics).
With, however, Hicks now saying a majority interest in the local baseball team is up for sale, depending on if Hicks is chummy with the potential buyer, then Wednesday’s next ballpark contact was, of course, Nolan Ryan.
As Hicks’ hand-picked, in-charge-of-everything team president, chummy seems to apply here. Plus, it has been speculated many times that Ryan and his longtime business partner, Don Sanders of Houston, would have an interest in buying a majority share of the Rangers. And no interest at all in what was previously being offered — a minority share.
"Knowing nothing about what the details are, and having not been involved in discussions [about being a majority owner], there’s no way I can comment on any of this," Ryan said.
Would it be something he would now explore?
"That’s hard to say," Ryan added, "without having talked to Tom about it."
On the sale of any team, commissioner Bud Selig’s office is involved in determining partners, since it’s a process where all investors have to eventually be checked out and approved by the other owners.
Under those guidelines, Hicks is being advised, and it can be assumed, also being given a list of potential investors by the commissioner’s office. But it’s a hard sell, obviously, when Hicks was offering only a minority interest while maintaining total control."
Hicks bought the Stars in 1996, and the team won the Stanley Cup three years later. In 1998, he purchased the Rangers from George W. Bush's group and Hicks created a stir in December 2000 when the Rangers signed Alex Rodriguez to a $252 million, 10-year contract. Hicks has said he owns 95 percent of both teams.
Two years ago, he combined with Montreal Canadiens owner George Gillett Jr. to buy the English soccer club Liverpool through a different entity.
To be honest, it's a smart business move on his part...
Banks and a lot of other folks need his business long-term, so he's doing this short-term to renegotiate his current debt load. We do it when it comes to re-financing our homes. Hicks is doing it with a lot more zeroes attached.
((HT: myfoxdfw.com))
The company that owns baseball's Texas Rangers and hockey's Dallas Stars has defaulted on about $525 million in loans, but owner Tom Hicks ((pictured, myfoxdfw.com)) said Friday that he intentionally made the move to help negotiate with banks.
Hicks told The Associated Press the teams won't be affected after Hicks Sports Group, his holding company, didn't pay an interest payment on the syndicated bank loans Tuesday. A syndicated bank loan is one made by a group of lenders to one borrower.
"What we want is the banks to allow us to use our interest revenue," Hicks said. "We need 51 percent approval, which we anticipate. It is hard to get two banks to agree to anything, much less 40 on a timely basis."
A financial news Web site called FINalternatives first reported Friday that Hicks Sports Group did not make its interest payment on a $350 million bank-term loan, $100 million second-lien loan and a $75 million revolving credit facility.
"Like so many other companies and institutions, HSG has been impacted by a global credit crisis which no one could have anticipated," Hicks said in a statement. "The company is not asking for additional money; it is only asking for full access to the interest reserve account and revolving credit line as well as some amendments in the debt covenants."
"This will be a nonevent to players, to the fans, our sponsors, our vendors, anybody," Hicks told the AP. "I just have to reach these agreements with me and these other lenders."
He said that the negotiations have nothing to with his other assets or his family's assets. Last week, Hicks said he was looking for investors to buy minority interests in the Rangers and the Stars. He said he was willing to let limited partners purchase up to 49 percent of each club, leaving him with a controlling interest. Hicks said he owns 95 percent of both teams.
"I'm bringing in minority partners, so I can pay off the loans," he said Friday. "I wouldn't normally do that. In this particular environment, that's what we should do."
Hicks also owns a 50 percent stake in Liverpool FC in the English Premier League, but that is owned through another entity. He said that he hopes that negotiations with the banks will be complete in a couple of weeks.
"All we want the banks to do is be reasonable," he said.
"Under normal market conditions, it would be a nonevent."
Here's coverage from James Rose and our friends at KDFW-TV...
The Montreal Canadiens could be going up for sale, reports La Presse in Montreal.
The newspaper, citing Canadiens president Pierre Boivin, reported on Monday owner George Gillett is considering options for many of his assets, including the legendary franchise.
"We're not hiding it; we're going through a very difficult economic period," Boivin told La Presse.
"The Gillett family has retained the services of financial advisers to assess various strategic alternatives to optimize the value of its corporate assets," said Boivin in a statement on Monday.
"In Canada, the family has retained the services of BMO Capital Markets and the process is underway."
Boivin drew a crowd of reporters at a downtown hotel Monday, however he did not give them any substantial information.
"Today, many of you would have liked I would talk to you about the performance of the team or the news of the day in regards to the financial measures taken by our owner," Boivin said. "But you will understand that I will abstain as it's not the time."
Forbes Magazine ranked the Canadiens as the NHL's third most valuable team back in October. The magazine estimated the club's worth to be $334 million. There were reports the club would be placed up for sale late last year, but Gillett and the Canadiens denied their accuracy.
Gillett purchased the Canadiens and the Bell Centre back in 2001 for $181 million. He also co-owns Liverpool soccer club along with interests in the Richard Petty Motorsports NASCAR team and Gillett Entertainment Group.
The CANADIAN PRESS is reporting that Research In Motion CEO Jim Balsillie is among the names being rumoured as the team's next owner. Others include billionaire Cirque du soleil owner Guy Laliberte, media giant Quebecor and Rene Angelil, manager and husband of singer Celine Dion.
The team does not expect the rumour of a potential sale to effect the team on the ice.
In December, Sports Business Journal reported that Gillett was looking to refinance a US$75-million loan he took out to guarantee his involvement in the purchase of Liverpool FC.
Gillett bought the Molson Centre and his majority stake in the Canadiens for $275 million with the help of $140 million in loans from two banks and the Caisse de depot et placement du Quebec, the province's pension fund manager.
Darren Dreger reports, at the same time, that Gillett's partner in Liverpool FC, Dallas Stars owner Tom Hicks is looking for minority owners for the Dallas Stars. Hicks has no intention of .selling the Stars or his stake in Liverpool.
