A group including Hall of Fame pitcher Nolan Ryan won a bankruptcy auction for the Texas Rangers baseball club, defeating a rival bid by Mark Cuban, the owner of the Dallas Mavericks basketball team.
Ryan and his partner, attorney Chuck Greenberg, won with an offer of $385 million plus the assumption of $208 million in team liabilities during an auction in a Fort Worth, Texas, courthouse.
Shortly after the group made the bid, Cuban bowed out of the auction. Clifton Jessup, his attorney, congratulated Greenberg and Ryan, and observers in the near-capacity courtroom applauded and cheered.
U.S. Bankruptcy Judge D. Michael Lynn is scheduled to consider approving the sale to Greenberg and Ryan later today. Major League Baseball rules also require 75 percent of its 30 team owners to approve the group as the buyer. The owners are set to meet later this month.
Cuban and his partner, Houston businessman Jim Crane, made several bids for the team during the auction, which ended about 12:45 a.m. Fort Worth time. Cuban’s final bid was $390 million, which adjusted downward to $373.2 million, mostly to account for a breakup fee that would have been paid to the Greenberg-Ryan group.
The Rangers filed for bankruptcy protection in May and agreed to an auction after initially seeking approval for a sale to the Greenberg-Ryan group.
The case is In re Texas Rangers Baseball Partners, 10- 43400, U.S. Bankruptcy Court, Northern District of Texas (Fort Worth).
For more about league approval, click here.
Odyssey Properties III Files Chapter 11 in Florida
Odyssey Properties III LLC, a Florida real estate company, and its affiliates filed for Chapter 11 protection on Aug. 2. A motion seeking joint administration of the cases was submitted yesterday.
The petition, filed in Tampa, Florida, listed assets and debts of as much as $50 million each. Court files identified Peter J. Munson as trustee for noteholders owed $29 million.
The company later this month will ask a bankruptcy judge for approval of management contracts and the hiring of a chief restructuring officer, according to court files.
The principal case is In re Odyssey Properties III LLC, 10- 18713, U.S. Bankruptcy Court, Middle District of Florida (Tampa).
Universal Building Products Files Chapter 11 in Delaware
Universal Building Products, Inc., a supplier of construction products such as decorative concrete and windows, filed for Chapter 11 bankruptcy protection yesterday in Wilmington, Delaware.
Universal Building, based in Westminster, California, declared assets of $1 million to $10 million and debts of $10 million to $50 million, according to court files.
Affiliates that also filed are Accubrace Inc., Don De Cristo Concrete Inc., Form-Co Inc. and Universal Form Clamp Inc., according to court files. Raytrans Distribution Services Inc. is listed as the largest creditor, owed $783,949.
First-day motions included requests to consolidate the bankruptcy cases and allow an asset sale.
The case is In re Universal Building, 10-12453, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Fourth Quarter Properties 166 Files for Bankruptcy in Georgia
Fourth Quarter Properties 166 LLC and affiliates filed for Chapter 11 protection from creditors on Aug. 3 in Newnan, Georgia, where the company is based.
The bankruptcy court filed a notice yesterday directing Fourth Quarter to complete the filing by submitting required documents, including a financial statement.
Stanley E. Thomas was listed as the largest unsecured creditor, owed $25.7 million. The company also owes $615,380 to the Coweta County Tax Commissioner and “an unknown” sum to the Georgia Department of Revenue, according to the petition.
Fourth Quarter declared assets of as much as $50 million against debts of as much as $100 million.
The case is In re Fourth Quarter Properties 166 LLC, NDGA 10-12920, U.S. Bankruptcy Court, Northern District of Georgia (Newnan).
Chemtura, Creditors Reach New Agreement Backing Plan
Creditors of Chemtura Corp., the bankrupt plastic-additives maker, can enter a revised agreement to support its Chapter 11 reorganization now that a dispute has been settled, Chemtura lawyer Natasha Labovitz said.
U.S. Bankruptcy Judge Robert Gerber in Manhattan said yesterday that the settlement resolved his concerns about the so-called plan support agreement, which had drawn objections from shareholders. Chemtura won provisional court approval of an outline of its reorganization on July 21 and seeks final court confirmation at a September hearing.
Under the agreement, creditors commit to vote in favor of the plan, the terms of which can’t be changed without their consent. Chemtura agreed to pay as much as $7 million in professional fees to an ad-hoc committee of bondholders.
The case is In re Chemtura Corp., 09-11233, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
General Growth’s Texas Teachers Investment Approved
General Growth Properties Inc., the second-largest U.S. mall operator, won approval of a $500 million investment from a Texas public pension plan to help finance its exit from bankruptcy.
U.S. Bankruptcy Judge Allan Gropper in New York yesterday approved a plan for the Teacher Retirement System of Texas to buy $500 million of shares in the reorganized General Growth at $10.25 a share.
The pension plan is joining Brookfield Asset Management Inc., Fairholme Funds Inc. and Pershing Square Capital Management LP to finance the Chicago company’s exit from bankruptcy protection, which is set for October.
Under the plan, Brookfield, Fairholme and Pershing have agreed to buy $6.3 billion of stock in the reorganized company at $10 a share in addition to other commitments. The pension plan will hold a 4.9 percent stake in General Growth when it leaves bankruptcy, and the other three investors will receive 62.8 percent before the exercise of warrants, according to court documents.
The Texas pension investment will reduce the other investors’ total $8.55 billion investment by $500 million, lawyers for General Growth said.
The agreement approved yesterday includes a $15 million breakup fee. Under the agreement, General Growth can reduce the Texas teachers’ investment by as much as 50 percent if more favorable financing becomes available.
The case is In re General Growth Properties Inc., 09-11977, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
American Safety Razor Gets Interim Order on Financing
American Safety Razor Co., the maker of shaving blades that filed for bankruptcy on July 28, won interim approval from the U.S. Bankruptcy Court in Wilmington, Delaware, to borrow as much as $25 million, including $7.5 million in letter-of-credit financing.
In the order signed July 30, U.S. Bankruptcy Judge Mary F. Walrath also gave the company permission to use its cash collateral and take other steps “to provide certain protections” to first-lien lenders who may see a “diminution in the value” of their lien interests as a result of the debtor-in-possession financing, the court papers showed.
A final hearing on the financing is scheduled for Aug. 25. Objections are due by Aug. 18.
American Safety Razor filed for Chapter 11 protection with a proposal to sell the company to first-lien lenders in exchange for debt unless second-lien creditors make arrangements to pay off the senior creditors within seven weeks. The second-lien lenders were proposing an alternative reorganization, under which they would pay off the first lien with debt financing and exchange the junior secured credit for the new equity.
The case is In re American Safety Razor Co., 10-12351, U.S. Bankruptcy Court, District of Delaware (Wilmington).
For more about the reorganization, click here.
Mexicana Airline Suspends Ticket Sales After Bankruptcy Filing
Compania Mexicana de Aviacion, Mexico’s biggest airline by passengers, stopped selling plane tickets as it seeks talks with labor unions after filing for protection from creditors in Mexico and the U.S.
The company, a unit of Grupo Mexicana de Aviacion, will continue operating flights normally, according to an e-mailed statement yesterday. Grupo Mexicana’s low-fare Click and Link units will keep selling tickets, the company said.
“This decision will offer certainty and confidence to consumers,” and help in negotiations with labor unions, Mexicana said.
Lizette Clavel, secretary general of the Flight Attendants Union of Mexican Aviation, in a phone interview yesterday said that the suspension “doesn’t help with the negotiations.” Fernando Perfecto, secretary general of the union that represents Mexicana’s pilots, wasn’t immediately available to comment, a spokesman said.
Creditors have seized three of Mexicana’s planes since July 29. The company owns only nine of the 61 airplanes it operates, according to Chief Executive Officer Manuel Borja Chico.
The U.S. case is Compania Mexicana De Aviacion SA de CV, 10-14182; U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Tops Markets LLC, the supermarket operator, agreed to sell seven Penn Traffic supermarkets to settle a U.S. Federal Trade Commission complaint that its purchase of 79 Penn Traffic stores would harm competition. Tops Markets bought the Penn Traffic supermarkets for $85 million after Penn filed for bankruptcy protection in November. The FTC said in a statement that the sale of the seven stores would resolve its charges that the acquisition would be anticompetitive in several areas of New York and Pennsylvania.
The bankruptcy case is In re Penn Traffic Co., 09-14078, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Lehman Supervisor Reinvests in Firm’s Real Estate, WSJ Says
Alvarez & Marsal Inc., the management-consulting firm that is supervising the insolvency of Lehman Brothers Holdings Inc., has reinvested more than $1 billion in apartments, offices and other commercial property already owned or financed by Lehman, the Wall Street Journal reported.
It’s a gamble that commercial property markets are close to their nadir, the newspaper said.
The advisory firm hopes to salvage as much as possible from the $14.4 billion of commercial real estate on the collapsed bank’s books, the Journal said.
U.S. Corporate Credit Risk Benchmark Increases for Second Day
A benchmark gauge of U.S. corporate credit risk rose for the second day. The Markit CDX North America Investment Grade Index Series 14, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, gained 0.6 basis point to a mid-price of 100.9 basis points as of yesterday morning in New York, according to Markit Group Ltd. The index, which typically rises as investor confidence deteriorates, touched a 12-week low on Aug. 12.
S&P Downgrades St. John Knits to B, Withdraws Ratings
St. John Knits International Inc., the Irvine, California- based maker and marketer of women’s apparel, had its corporate credit rating lowered yesterday to B from B+ by Standard & Poor’s.
Immediately following the downgrade, S&P is withdrawing its corporate credit rating on St. John at the company’s request, S&P said in a statement. The outlook is “stable,” S&P said.
The downgrade reflects concern that while “profitability should show some further improvement,” St. John’s credit metrics “will not improve to previous levels” because of the high interest rate on the company’s new term loan and the “weak” economy, S&P said.