On Tuesday, a hearing will begin that should determine whether the "pre-packaged bankruptcy" deal struck by the Greenberg-Ryan group to purchase the Texas Rangers is valid, or whether the whole sale process will be re-opened to other offers. The latter would represent a victory for the creditors, who maintain that the Rangers are not being sold to the highest bidder.
Rather than Greenberg-Ryan, the creditors would like to see the Rangers sold to Houston businessman Jim Crane, who is interested in purchasing the franchise and has reportedly offered $13-20m more than the Greenberg-Ryan group. The issue is that Tom Hicks' HSG entered into an Asset Purchase Agreement with the Greenberg-Ryan group, allowing for negotiation exclusivity.
Says the Sports Business Journal:
But it was HSG's own counsel that told MLB that prospective owner Chuck Greenberg's offer was inferior to one from Houston businessman Jim Crane. "It is unlikely we can recommend that we proceed forward with Greenberg based on where we are with their proposal and assuming we can proceed forward with Crane."
MLB Senior VP & General Counsel Tom Ostertag in an e-mail to [HSG counsel] West on Dec. 29, 2009, which was included in the bankruptcy court filings, said because Greenberg had been preliminarily chosen by HSG on Dec. 15, HSG could not entertain other offers.
Rangers blog Lone Star Ball is none too happy with everything that's going on right now:
So, basically...Hicks Sports Group entered into an exclusive agreement with Chuck Greenberg's group to sell the team to Greenberg's group in December.
As negotiations stalled, Crane re-entered the picture, seemingly in violation of the exclusivity provision in the sales agreement, and HSG's counsel then contacted the lenders to recruit them to "weigh in" so that HSG would not "be stucking negotiating" with Greenberg.
Then MLB took over the Rangers and the sales process, cutting HSG out of the loop.
There are more details that need to come out, of course...
But this reads to me like the lenders are playing hardball because HSG (which, ultimately, is Tom Hicks) encouraged the lenders to play hardball to squelch the sale to the Greenberg group.
This is the sale that will never end.