Wednesday, 31 August 2016
Last updated 13 hours ago
May 4 2010 | 4:17am ET
Major League Baseball is poised to seize the Texas Rangers from private equity veteran Tom Hicks to prevent the team’s creditors, led by a hedge fund, from forcing it into bankruptcy.
Hicks’ sports team holding company, Hicks Sports Group, agreed in January to sell the Rangers to a group led by Pittsburgh lawyer Chuck Greenberg and Nolan Ryan, the legendary Hall of Fame pitcher who serves as president of the team. The move came after HSG defaulted on $525 million in debt last April, an event first reported by FINalternatives.
Both MLB and Hicks are believed to strongly favor Greenberg’s roughly $500 million offer, the latter due to Ryan’s involvement and the former because Greenberg has agreed to buy a huge tract of land surrounding Rangers Ballpark in Arlington, Texas, owned by Hicks, and not by HSG. But Monarch Alternative Capital, which holds about $100 million of the $525 million in defaulted debt, and about 40 other creditors are seeking to block that deal, which they call the cheapest of three bids for the team.
MLB believes that it can deprive the bondholders of their right to block the sale, as their contracts are with HSG. The creditors would doubtless dispute that contention in court; in the meantime, MLB is trying to act as a mediator between the two sides. MLB President Bob DuPuy has gone as far as to hold one-on-one talks with Monarch’s Andrew Herenstein, Sports Business Journal reports.
Baseball has been helping the Rangers meet their payroll as the team’s financial woes have continued in recent months. If the team is not sold by June, it could need to borrow even more than the $16 million it has already taken from the league.
Hicks is also moving to divest himself of his other sports teams, exploring the sale of the Dallas Stars hockey team and last week announcing plans to sell his 50% stake in England’s Liverpool Football Club.