Friday, 24 February 2017
Last updated 3 hours ago
Aug 16 2011 | 2:25pm ET
More than a year after the team was sold, the Texas Rangers' post-bankruptcy administrator has sued its former owner on behalf its creditors, led by hedge fund Monarch Alternative Capital.
According to the lawsuit, filed on behalf of Texas Rangers Baseball Partners by administrator Alan Jacobs, Tom Hicks, the private equity veteran, wrongly used tens of millions of dollars from the team to buy and develop parking lots near the Ranger's home ballpark in Arlington, Texas.
Hicks still owns those parking lots, which are also adjacent to the Dallas Cowboys' new stadium, and reaps millions of dollars a year from them.
According to Jacobs' complaint, Hicks "embarked on a scheme to build a real-estate empire on the backs of the Texas Rangers' players and creditors and fans of the team," ignoring his fiduciary duties to the team and leaving it "without sufficient money to field a competitive team."
"The lawsuit," filed in Dallas state court, "reflects a bizarre flip-flop on the part of the complainants, a group led by a distressed debt hedge fund," Hicks spokeswoman Lisa LeMaster said in a statement. "We welcome the opportunity to challenge these allegations in court."
LeMaster added that during the Rangers' bankruptcy proceedings last year, the Monarch-led group said the parking lots were of little value. "Now they say it is worth $100 million."
Separately from the Dallas lawsuit, JPMorgan Chase has amended its complaint against Hicks in federal bankruptcy court. The bank is now seeking at least $35.4 million on behalf of the Rangers' creditors.
The new JPMorgan lawsuit also accuses Hicks of failing in his fiduciary duties to the Rangers and accuses him and his Hicks Sports Group of attempting "to conceal the fraudulent nature of the commitment termination" from his creditors.
LeMaster did not comment on the JPMorgan lawsuit.