The Texas Rangers’ lenders said Houston businessman Jim Crane made the highest bid for the team, not a group led by Nolan Ryan and Chuck Greenberg, which has a deal to buy the team and take it out of bankruptcy.
The lenders, led by JPMorgan Chase & Co., said yesterday in a court filing that Major League Baseball blocked Crane’s negotiations with the Rangers, while steering the sale toward the Greenberg-Ryan group.
The lenders called for U.S. Bankruptcy Judge D. Michael Lynn in Forth Worth, Texas, to order a competitive sale process during the bankruptcy case to ensure the best deal for the team.
“The lender parties have no desire to achieve a predetermined outcome or a sale to a predetermined purchaser; they ask only for a fair process,” they said.
George Postolos, who has represented Crane and has attended a Rangers court hearing, didn’t immediately return a call seeking comment after regular business hours yesterday. Stephen Shimshak, a lawyer representing Major League Baseball, also didn’t return a call and e-mail.
The Rangers countered in court papers yesterday that the $575 million Greenberg-Ryan deal is the best one for the team. While the lenders may “speculate” about a competing bid, a rival buyer faces “significant execution risk,” the team said.
Given those risks, the team “then believed and still believes that the only prudent choice” was to enter into the purchase agreement with the Greenberg-Ryan group, the Rangers said.
The lenders didn’t say in their court filing how much Crane bid for the team, said Adam McGill, a spokesman for a group of lenders. The filing cites exhibits that they said back up their argument that Crane offered the best deal. The exhibits weren’t attached to a copy of the court filing provided by the lenders to Bloomberg News. That filing and the one by the team couldn’t be confirmed independently with the court.
Texas Rangers Baseball Partners filed for Chapter 11 bankruptcy protection on May 24, announcing the proposed sale to the Greenberg-Ryan group. The team says the deal will pay creditors in full. Lynn has scheduled a July 9 hearing to consider approval of the sale.
The lenders said they are owed $576 million under first-and second-lien debt to Tom Hicks’s HSG Sports Group LLC, the Rangers’ parent company, which isn’t in bankruptcy. Texas Rangers Baseball Partners has guaranteed $75 million of the debt.
In their court filing, the lenders said a series of transactions on the eve of the bankruptcy filing shifted liabilities and were an effort by the team and the league to defraud them. The lenders said the transactions should “should shock the court.”
The case is In re Texas Rangers Baseball Partners, 10-43400, U.S. Bankruptcy Court, Northern District of Texas (Fort Worth).