25 May 2010

Texas-sized Disaster

Just as others like myself had feared, the Texas Rangers fiasco has turned into a very messy situation that may end up dragging the MLB through the muck--just what the worst PR managers in sport need right now. Here's a summary of the latest developments, links included.
  • Heading the creditors off at the pass, current owner Tom Hicks has filed Chapter 11 on behalf of the Texas Rangers organization as a means of completing the sale without lender approval.
     
  • The filing accelerates the sale by separating the Texas Rangers from the Hicks-owned HSG Sports Group.
     
  • Oddly enough, the list of unsecured creditors includes Alex Rodriguez, Kevin Millwood, Michael Young, Vincente Padilla, Mickey Tettleton and Mark McLemore who are owed deferred compensation from their days playing for the Rangers.

  • Nolan Ryan, senior partner in the Greenberg-Ryan group that is attempting to purchase the team, sent an open letter to fans claiming that the proceedings will not affect day-to-day operations.
     
  • The club hopes to fulfill Ryan's assurances through motions against any potential injunctions by creditors hoping to use Rangers assets to fulfill HSG's obligations, or to simply gain more leverage in negotiations.
     
  • The MLB is extending a line of credit to the Rangers for the purpose of continuing day-to-day operations unencumbered.
     
  • The creditors are reportedly weighing their legal recourse in the wake of the filing, as removing the team from the negotiations eliminates a significant source of leverage and potential capital for the lending party.
     
  • The sale of the Texas Rangers to the Greenberg-Ryan group must meet the approval of 23 of the 30 MLB teams and pass muster in bankruptcy court, in addition to any other legal hurdles that may arise pending future action by creditors.
     
  • As both bankruptcy and creditor proceedings make their way through the courts, plaintiffs and claimants may use the power of discovery to reveal information that the MLB would much rather keep secret.
Relevant Links:
Editors Note: I'm not sure how many Roundtrippers I'll keep posting. I modeled them after Rob Neyer's SweetSpot link dumps, and I rather liked the name, but it turns out they take a lot of daily devotion. Instead, I think I'll follow Tom Tango's model and post a link and a summary when I see something interesting. For me, this means more posts and less work. For you, it means more analysis from yours truly. Seems to me that this is the optimal solution.

(Photo Credit: Ballpark Biz)

No comments:

Post a Comment

Please Be Civil.