Creditors for the Texas Rangers are seeking to expand the baseball team's recently filed Chapter 11 bankruptcy by forcing two of the club's equity holding firms into the case.
A group of creditors that holds some of the $525 million in team debt filed involuntary bankruptcy petitions Friday against two holding companies that are controlled by Rangers owner Tom Hicks. The Rangers filed for Chapter 11 bankruptcy on Monday, part of an effort to pave the way for a stalled $575 million sale of the team by Hicks' financially strapped ownership group, Hicks Sports Group.
A spokesman for the creditors, which include Kingsland Capital Management and Monarch Alternative Capital, said the move was meant to "ensure that the bankruptcy proceedings meet the objective of maximizing value for all creditors."
The Texas Rangers issued a statement saying, "The unsurprising action taken by the creditors involves holding companies that conduct no commercial business and have no employees or operating assets. It is nothing more than jockeying for position in an orderly process that was initiated on May 24."
The American League West-leading Rangers filed for bankruptcy protection four months after Hicks agreed to sell the team to a group led by Hall of Fame pitcher and team president Nolan Ryan and Pittsburgh attorney Chuck Greenberg for $575 million.
The filing is meant to help remove claims by creditors against Hicks Sports Group, which defaulted on $525 million in loans last year, that have held up the sale.
On Wednesday, a bankruptcy judge approved a multimillion-dollar Major League Baseball loan to keep the Texas Rangers afloat during bankruptcy proceedings. That raises the prospect that a sale may go through this summer.
In its statement, the Texas Rangers added: "Following the court's orders, the Rangers are conducting normal baseball and business operations and, importantly, the court has set a schedule that is consistent with our objective of completing the sale of the Rangers to the Greenberg-Ryan group by mid-summer. We do not believe this action by the creditors will affect that schedule."