|Published:||Aug 05, 2010 7:18 PM EDT|
|Updated:||Aug 06, 2010 4:30 AM EDT|
FORT WORTH, Texas (AP) â€” The Texas Rangers got approval Thursday to exit federal bankruptcy protection, an anticlimactic end to one of the most contentious sales of a professional sports team.
The hearing on the team's reorganization started just eight hours after a courtroom, in the early hours of Thursday morning, erupted in raucous cheers when Hall of Fame pitcher Nolan Ryan's group won the bidding war for the Rangers in a marathon auction with Dallas Mavericks owner Mark Cuban.
The sale was included in the team's plan, approved later Thursday by U.S. Bankruptcy Judge Stacey Jernigan. That clears the way for Major League Baseball to formally approve Ryan, also the Rangers president, and sports attorney Chuck Greenberg as the team's owners next week.
The team's assets will then be sold to the Greenberg-Ryan group, and the Rangers will officially emerge from Chapter 11 protection.
The Rangers' plan and sale to the Greenberg-Ryan group had been in jeopardy since shortly after the bankruptcy filing in May. Angry creditors successfully argued to re-open the bidding although the Greenberg-Ryan group was chosen as the team's owner in January after the original sale process. The court-appointed restructuring officer had said he would veto the reorganization plan because the team had not maximized its assets.
If the plan had been rejected, the team would have remained in bankruptcy court for awhile and the Greenberg-Ryan group â€” endorsed by Major League Baseball â€” would have lost its chance to purchase the team, since its funding guarantee expires Aug. 12.
But after nearly three months of arguing attorneys, surprise lawsuits and even two-last minute attempts by Greenberg-Ryan to stop the auction, the group ended up with a winning bid valued at $590 million â€” about $100 million more than its starting bid.
The final bid from Cuban and Houston businessman Jim Crane, before the group dropped out because it reached a predetermined limit, was valued at $581 million â€” discounted some $17 million because of deductions and a breakup fee of $10 million to $13 million that would have gone to Greenberg-Ryan had they lost.
Later Thursday morning, the restructuring officer and creditors said they supported the team's revised plan, in part because the auction resulted in a higher price for the AL West-leading Rangers.
"I was wrong," Andrew Leblanc, an attorney for some of the top creditors, told the judge. "I've never been happier to say I was wrong."
Rangers attorneys later told the judge that all disputes with lenders and others had been resolved, including an objection filed by Alex Rodriguez over concerns that he and other former players may not get the millions that the Rangers owe them. The Greenberg-Ryan group's winning bid includes paying more than $200 million to unsecured creditors â€” including Rodriguez, who is owed $24.9 million in deferred compensation six years after his trade to the New York Yankees.
Mitchell Seider, an attorney for lender JPMorgan Chase, said the company would dismiss its lawsuit that sought to sever the Rangers stadium lease from the sale.
When the judge approved the plan Thursday afternoon, after team attorneys made some revisions, a few people in the nearly empty courtroom clapped. The creditors, restructuring officer, league officials and even Greenberg â€” and all of their attorneys â€” were long gone, leaving after the morning session.
Also absent was the hoopla seen at previous hearings, but the significance of the judge's ruling was not lost on Kellie Fischer, the team's chief financial officer.
"This is an unbelievable relief. I can't describe it," Fischer said. "I'm thrilled to be done with this process."
Creditors will receive $75 million from the team in the bankruptcy plan, but the judge has said they can sue other entities of Hicks Sports Group, which defaulted on about $525 million in loans last year. Rangers' owner Tom Hicks is co-owner of the Liverpool football club, which is for sale, but the London sports team is not part of Hicks Sports Group and is safe from creditors in the Rangers' bankruptcy case.
The Greenberg-Ryan group's bid had removed a provision that would have covered legal fees if Hicks was sued, and Hicks will not be part of the new organization, Greenberg said.
Hicks said in a statement Thursday that he was "relieved and energized" that the sale was almost complete. He said Ryan, Greenberg and their investors will be "superb stewards of the Texas Rangers. You have to admire their endurance, dedication and commitment over the last 15 months to get this transaction complete."