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Texas Rangers, Lenders Agree on Restructuring Officer to Monitor Team Sale
The Texas Rangers and lenders opposing a proposed sale of the Major League Baseball team agreed on the selection of a chief restructuring officer who may decide whether the $575 million deal will go forward.
The bankrupt team and its bank lenders, led by JPMorgan Chase & Co., agreed to name William Snyder to oversee the Rangers’ equity owners and decide whether to support the sale, according to Andrew Leblanc, a lawyer for the lenders, and Martin Sosland, the Rangers’ bankruptcy lawyer.
Judge D. Michael Lynn in Fort Worth, Texas, decided today that the Rangers’ equity owners -- Ranger Equity Holdings LP and Rangers Equity Holdings GP - must approve the sale.
“We agree with the judge’s decision to appoint a fiduciary to consider whether this sale is in the best interests of the creditors,” Leblanc said in an interview after today’s court hearing. “It brings transparency in a process where that has been lacking.”
Texas Rangers Baseball Partners filed for bankruptcy May 24 after the lenders refused to consent to the team’s sale to a group led by Chuck Greenberg and team President Nolan Ryan, the eight-time All-Star pitcher who holds the all-time Major League record of 5,714 strikeouts. The lenders say the team rejected a higher offer for the team from Houston businessman Jim Crane.
Sosland said in an interview after today’s hearing that both sides agreed to Snyder’s appointment during mediation. Snyder, a managing partner at CRG Partners Group LLC, worked as the chief restructuring officer for Pilgrim’s Pride Corp. during its bankruptcy case.
Snyder must consider whether the sale is in the best interests of creditors, including the lenders, said Adam McGill, a spokesman for the lenders group.
Equity Owners
Snyder will be able to make decisions for the two equity owners and decide whether to support the sale, Sosland said. The equity owners are indirect subsidiaries of Tom Hicks’s HSG Sports Group LLC.
Kimberly Kriger, a Rangers spokeswoman, said in an e-mail that the team “supports an independent review of the Greenberg- Ryan transaction.”
“During the review, Nolan Ryan and the Rangers management team will continue to direct and administer the club under Mr. Hicks’ ownership,” Kriger said.
The Rangers and the lenders have clashed over whether the lenders should be able to vote on the team’s bankruptcy plan and the proposed sale. The Rangers argued that the lenders weren’t entitled to vote because their rights aren’t impaired in the plan and the sale will pay in full a $75 million guaranty. The lenders, which provided $525 million in loans to HSG Sports Group, disagreed and demanded a vote. The team guaranteed $75 million of that debt.
Vote Change
In his decision today, Lynn sided with the lenders, saying that if the team’s plan isn’t modified, it can’t win court approval without acceptance by the lenders. The judge also said that, while the equity owners consented to the sale before the team’s bankruptcy filing, they must have a chance to reconsider their support.
Sosland said the plan could be easily fixed so that the lenders won’t have the right to vote on the plan. He called that part of the judge’s ruling “a minor issue.”
The case is In re Texas Rangers Baseball Partners, 10-43400, U.S. Bankruptcy Court, Northern District of Texas (Fort Worth).
To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net.
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