Some of the Texas Rangers' creditors on Tuesday sought a chance to vote on the club's bankruptcy plan, hoping to kill the team's proposed sale and restart the bidding process.
U.S. Bankruptcy Judge D. Michael Lynn is expected to rule next week on whether creditors, owners or both will be able to vote on the plan. The team hopes to pay creditors $75 million and sell the club to a group led by Hall of Fame pitcher and team president Nolan Ryan and Pittsburgh attorney Chuck Greenberg.
Creditors have said they will vote no, so the plan will be killed unless owners are allowed to vote. If that happens, Lynn will review certain bankruptcy codes and make a ruling July 9.
Andrew LeBlanc, an attorney for the top lenders, said Tuesday that the Rangers "couldn't write us a $75 million check and we would go away." He disputed the team's claim that it owes just $75 million, saying it is obligated to pay more than $525 million in loans that team owner Tom Hicks' ownership group defaulted on.
LeBlanc also said the bidding process should reopen because the Greenberg-Ryan bid was not the highest, showing Hicks' "insurmountable" conflict of interest.
The $575 million sale announced earlier this year has been stalled by creditors' concerns over the financially strapped Hicks Sports Group.
But LeBlanc said the bankruptcy filing took away creditors' rights in the original loan agreement, which stipulated that lenders had to approve the team's sale.
On Tuesday Martin Sosland, a Rangers attorney, said $75 million was the debt lenders agreed to, and he disputed some creditors' claims the team did not accept the highest bid to maximize its assets.
The Rangers have said the Greenberg and Ryan bid was the best.
The judge said he tended to agree with the Rangers' argument, saying there were "considerations beyond value that will play a role" in the sale. Lynn compared the situation to an art dealer who sells a rare painting to a museum instead of a someone who would pay more but hang it in a private home.
But Lynn told creditors that their argument may apply to Hicks' other companies.
The judge has not yet ruled on a creditors' motion to force two of the club's equity holding firms, both under Hicks Sports Group, into the bankruptcy case.
The Rangers filed for bankruptcy last month, a rare step for any professional Major League Baseball team. The judge previously approved a multimillion-dollar MLB loan to keep the Rangers afloat during bankruptcy proceedings.
Although Ryan and Greenberg do not know when the sale might be final, they said the Rangers plan to be active at the July 31 non-waiver trading deadline. The team is already negotiating contracts with players taken in the amateur draft this month.
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