Thursday, 26 May 2016
Last updated 12 hours ago
Aug 2 2010 | 6:17am ET
The hedge fund creditors of the bankrupt Texas Rangers baseball team are set to get exactly what they wanted on Wednesday: an auction of the team, and a likely bidding war.
U.S. Bankruptcy Judge D. Michael Lynn on Friday rejected a last-minute effort by Pittsburgh lawyer Chuck Greenberg and Hall of Fame pitcher Nolan Ryan to stop the auction. The Greenberg-Ryan group, which is favored by Major League Baseball, won the original bidding process to buy the team from private equity billionaire Tom Hicks, but were stopped in their tracks by unhappy creditors of the Rangers and Hicks Sports Group, which owns the team. The creditors, led by hedge fund Monarch Alternative Capital, believe that the Greenberg-Ryan bid was the lowest of the three received by the Rangers, but that it offered more favorable terms to Hicks, who sports-team holding company defaulted on more than $500 million in debt last year, as first reported by FINalternatives.
The Greenberg-Ryan group, which initially offered $575 million for the team and its stadium in Arlington, Texas, upped their offer by $40 million on Friday. But Lynn ordered the auction go forward on Wednesday anyway, after lawyers for two possible bidders—including Mark Cuban, the outspoken owner of basketball’s Dallas Mavericks—said they might participate in the auction. Bidding for the team will start at $306.7 million, the cash portion of the original Greenberg-Ryan bid.
The Monarch creditors group pushed for the auction to proceed. But Alex Rodriguez, the New York Yankees slugger who was traded to the Bronx Bombers by the Rangers six years ago, is none too happy about it.
Rodriguez filed an objection in bankruptcy court, arguing that “it is not clear under the [bankruptcy] Plan that Rodriguez’ Contract will be assumed and assigned.” Rodriguez, who signed a 10-year, $250 million contract with the Rangers in 2001, said he is still owned $24.9 million in deferred compensation by the team.