Sunday, 29 March 2015
Last updated 1 day ago
May 12 2010 | 2:53am ET
Major League Baseball is playing hardball with the hedge fund creditors of the Texas Rangers, but the move seems to have backfired in a big way.
Baseball is keen to see the team sold 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 sale became necessary after current owner Tom Hicks, the private equity veteran, defaulted on $525 million in loans last April, as first reported by FINalternatives. But those creditors, led by hedge fund Monarch Alternative Capital, believe they are getting shortchanged on the Greenberg deal, which they call the cheapest of three bids for the team.
The creditors have further dug in their heels last week after Baseball Commissioner Bud Selig sought to force their hand. Selig sent a letter on April 30 warning that if the creditors do not approve the deal, he will unilaterally revoke their liens against the team, Sports Business Journal reports.
Selig, who could also seize the Rangers from Hicks Sports Group, would invoke the “best interests of baseball” clause that gives him wide authority over all of the sport’s teams. He set a deadline of last Tuesday for the creditors to approve the Greenberg sale.
But they did just the opposite, with creditors holding 95% of the debt voting that day to reject the deal. And they issued a warning of their own to Selig and baseball’s other owners, who are meeting this week in New York: Mess with us, and you’ll never see another dime in financing.
Baseball teams rely heavily on financing, in particular when they change hands.
“Bud can forget any lender, which includes any hedge fund or anyone, [lending] a single nickel or dime into baseball again” if he cancels the liens or seizes the team, Dornoch Capital Advisors’ Joe Kosich told SBJ. Kosich is the former head of sports lending at Wachovia.
Of course, the creditors aren’t relying merely on threats. They have prepared an involuntary bankruptcy petition for the Rangers that is ready to be filed if needed.
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…