Bankruptcy Judge D. Michael Lynn ruled last week that the winning bid for the Texas Rangers doesn’t need to be the highest bid in order for it to be valid. He added that other factors should be considered when deciding which bid should be approved for purchasing the Major League Baseball (MLB) team.
Meanwhile, the Rangers’ biggest lenders demanded a right to vote against the proposed sale of the team to Ryan and Pittsburgh sports attorney Chuck Greenberg, claiming they’ve been hurt by the bankruptcy and an allegedly fraudulent, “midnight” transfer of the team’s stadium lease before the Chapter 11 filing in May.
Lynn said he would soon permit mail-in balloting by some classes of creditors on the pre-packaged bankruptcy plan that includes the $575 million sale to the Greenberg-Ryan group.
But the federal judge said he could still rule that the lenders were not damaged by the bankruptcy, rendering the vote meaningless. Attorneys said voting could be as early as next week.
According to senior lenders, the creditors in the Texas Rangers Chapter 11 bankruptcy are contractually guaranteed at least, if not more than a $75 million repayment cap which is part of the terms in the proposed Greenburg-Ryan purchase agreement of the Texas Rangers. If the Greenburg-Ryan purchase is approved, the first lien lenders will get paid the cap and other creditors will be paid part of whatever money is left over, if any. This is the major reason why the lenders are working hard to get the bidding re-opened in the Texas Rangers bankruptcy case. They are hoping to raise $30 million more and increase the amount they will be paid in the Chapter 11 bankruptcy case.