The hedge fund creditors of the Texas Rangers continued their effort to derail the baseball team’s sale at a bankruptcy hearing this week, demanding that team owner and private equity legend Tom Hicks be removed from the decision-making process and bitterly disputing the amount they are to receive in the sale.
Andrew Leblanc, an attorney for the creditors, led by hedge fund Monarch Alternative Capital, asked a bankruptcy judge in Fort Worth, Texas, to appoint a trustee to replace Hicks as the decision-maker for the Rangers’ equity holders. He called into question Hicks’ impartiality, noting that both Hicks and Major League Baseball favor the $575 million deal led by Hall of Famer Nolan Ryan—a deal the hedge funds say undervalues the Rangers. Leblanc also pointed out that Hicks himself stands to win a $75 million windfall from the sale of land around the Rangers Ballpark in Arlington, Texas, “only if Ryan-Greenberg succeeds in acquiring the team.”
The creditors also complained about the transfer of the lease on that ballpark to the Rangers for $10, and about the $75 million they are set to receive if the Ryan-Greenberg sale happens. Creditors would like to get $150; they are owed $525 million by the Hicks Sports Group holding company, whose default last year—first reported by FINalternatives—precipitated the decision to sell both the Rangers and the Dallas Stars hockey team.
The Rangers denied the hedge fund allegations, calling the Ryan-Greenberg bid “the best combination of price and least execution risk.”
U.S. Bankruptcy Judge D. Michael Lynn seemed inclined to agree, noting there were “considerations behind value that will play a role.”
Martin Sosland, a lawyer for the team, also told the court that the creditors are entitled to only $75 million.
“The lenders are receiving everything they’re entitled to receive,” he said.