Baseball’s Rangers Try To Preempt Hedge Fund Creditors In Bankruptcy

May 25 2010 | 12:41pm ET

Faced with the threat of an involuntary bankruptcy petition by its hedge fund creditors, the Texas Rangers baseball team has preempted it—by filing for bankruptcy protection itself.

The Rangers upped the ante yesterday in their battle with the creditors, led by hedge fund Monarch Alternative Capital, seeking to force a sale to a Pittsburgh lawyer and Hall of Famer Nolan Ryan that is favored by Major League Baseball. Monarch and its fellow creditors, who are owed more than $500 million by current Rangers owner Hicks Sports Group, earlier this month balked at the $575 million deal, despite the intervention of baseball Commissioner Bud Selig.

HSG, which is led by private equity veteran Tom Hicks, defaulted on $525 million in loans last year, as first reported by FINalternatives. Both Hicks and the Rangers proposed new owners say that the creditors will be made whole. But Monarch and its confreres believes that Hicks and MLB have passed over two better deals for the team in order to keep it in Ryan’s hands.

The creditors also object to what they see as a sweetheart aspect of the deal for Hicks, who would receive $75 million of the total for 150 acres in parking lots adjacent to Rangers Ballpark in Arlington, Texas. Creditors would receive only $230 million from deal, rather than the $320 million they sought. HSG plans to repay them the rest through its sale of hockey’s Dallas Stars. Hicks is also planning to sell his 50% stake in England’s Liverpool Football Club, but that stake is not owned by HSG.

Talks between the two sides broke down when they were only about $20 million apart, with HSG offering $280 million and the creditors demanding $300 million.

It is unclear what Monarch and the creditors plan to do, or whether they will launch an all-out war to block the sale to the Ryan group. But Chuck Greenberg, the lawyer putting up most of the money for the team, believes that sale will go through.

“Odds are, the creditors won’t handle this well,” he said at a press conference yesterday. “They may very well make a lot of noise. But the bottom line is the Rangers will satisfy all their obligations.”


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.