The sale of the Texas Rangers to a group led by Chuck Greenberg and Nolan Ryan, which has been pending approval by Major League Baseball and the principal lenders holding the debt on Hicks Sports Group, has been held up for a number of months, as the creditors have thus far been dissatisfied with the terms of the transaction. On Monday, however, an end to the ordeal seems to have come into view:
Texas Rangers Baseball Partners, the current owners of the Texas Rangers Baseball Club, and Rangers Baseball Express, the local investor group led by team president Nolan Ryan and Chuck Greenberg, today announced a plan to facilitate completion of the previously announced sale of the Club to the Greenberg-Ryan group.
The Rangers sale will be accomplished through a voluntary, “prepackaged,” court-supervised process under Chapter 11 of the U.S. Bankruptcy Code pursuant to a plan previously negotiated and agreed to by the current Rangers owners and the Greenberg-Ryan group.
The sale of the team and its ballpark lease, along with the separate sale of land around the stadium, has a total value of around $575 million. It's worth noting, however, that while the deal allows for "all Rangers creditors to be paid in full," it's the creditors of the Hicks Sports Group who've been making all the noise. The Rangers have been on the hook for $75 million. HSG has been on the hook for much much more, and HSG's creditors rather significantly are not part of this filing. Those creditors were not made aware of this plan prior to its announcement. As Maury Brown states:
The latest restructure plan by Texas Rangers Baseball Partners, with MLB's blessing, was not made known to the creditors in advance of the announcement today. With the plan ostensibly fulfilling the debt surrounding the Rangers sale, it is unknown what legal footing the creditors have in chellenging the move.
Craig Calcaterra believes that, in order for MLB and the Rangers to proceed with this announcement, there must be some side agreement between HSG and its creditors. The creditors have been threatening rather unpleasant legal action in the event that they aren't paid, and it seems unlikely that MLB and the Rangers would proceed with this arrangement without in some way ensuring that such action doesn't take place. However, the details on all this are light at the moment, and no one can be quite sure how it's all going to play out. If this does go down, the whole situation will be resolved in just a couple months.
As an interesting side note, the original documents include a list of the Rangers' top 30 unsecured creditors. Numbers one through six are former players awaiting deferred compensation. Number one? Alex Rodriguez, who is still owed nearly $25 million. That's $25 million that he may never be paid. Unlikely, but possible.
For more on this latest bit of news, be sure to check out Lone Star Ball.