The Texas Rangers got approval Thursday to exit federal bankruptcy protection, little more than 12 hours after Hall of Fame pitcher Nolan Ryan's group was awarded the team at a marathon auction showdown with billionaire Mark Cuban.
U.S. Bankruptcy Judge Stacey Jernigan's approval of the team's reorganization plan clears the way for Major League Baseball to formally approve Ryan and sports attorney Chuck Greenberg as the team's owners next week, before the group's financing guarantee expires Aug. 12.
The court-appointed restructuring officer and creditors had opposed the bankruptcy plan, filed in May as a way to push through the sale to the Greenberg-Ryan group. But on Thursday, they said they supported the revised plan, in part because the auction resulted in a higher price for the AL West-leading Rangers.
"I was wrong," said Andrew Leblanc, an attorney for some of the top creditors. "I've never been happier to say I was wrong."
Creditors will receive $75 million from the team in the bankruptcy plan, but the judge has said they can sue other entities of Hicks Sports Group, which defaulted on about $525 million in loans last year. Rangers' owner Tom Hicks is co-owner of the Liverpool football club, which is for sale, but the London sports team is not part of Hicks Sports Group and is safe from creditors in the Rangers' bankruptcy case.
Rangers attorneys told the judge that all disputes with lenders and others had been resolved, including an objection filed by Alex Rodriguez over concerns that he and other former players may not get the millions that the Rangers owe them. The Greenberg-Ryan group's winning bid does include paying more than $200 million to unsecured creditors -- including A-Rod, who is owed $24.9 million in deferred compensation six years after his trade to the New York Yankees.
Mitchell Seider, an attorney for lender JPMorgan Chase, said the company would dismiss its lawsuit that sought to sever the Rangers stadium lease from the sale.
The Greenberg-Ryan group won the bidding war with Cuban, owner of the Dallas Mavericks, just before 1 a.m. Court documents say the winning bid is valued at $590 million.
Cuban and Houston businessman Jim Crane's bid was valued at $581 million, discounted some $17 million because of deductions and a breakup fee of $10 million to $13 million that would have gone to Greenberg-Ryan had they lost.
"This is quite a remarkable result," U.S Bankruptcy Judge D. Michael Lynn said at Thursday's hearing, before he had to leave and turn the proceedings over to Jernigan. He said he wanted to thank Cuban, who "stepped aside with grace when the time came."
Cuban was all smiles as he spoke warmly about Ryan and Greenberg after the auction. On his blog Thursday, Cuban said "there were more than a few times I thought we had the thing won."
"They were arguing about everything and anything to knock down our bid. I thought it was because they were out of it. As it turns out, they obviously were not," he wrote. "They beat us fair and square."
The Greenberg-Ryan group had Major League Baseball's endorsement since being chosen as the new team owners after last year's original sale process. But the deal was stalled by angry creditors and then, unexpectely, by the team's May bankruptcy filing.
The Greenberg-Ryan group reluctantly agreed to an auction last month, but then tried to stop it. Late last week and again Tuesday night, on the eve of the auction, the group proposed undisclosed offers -- higher than its opening bid of about $500 million -- to buy the team in lieu of an auction.
In both cases, the judge rejected the proposals.
More on the Greenberg-Ryan Group
Court documents filed in June during the federal bankruptcy proceedings for the Texas Rangers revealed Nolan Ryan was given a salary of $1.5 million as president of the baseball group.
Ryan also owns two minor league teams-- the Class AA Texas League Corpus Christi Hooks, and the Class AAA Pacific Coast League Round Rock Express.
Both teams are affiliates of the Houston Astros. Ryan served as a special assistant to the general manager of the Astros until he became president of the Rangers in 2008.
He did have a majority ownership in Express Bank of Alvin, but sold his interest in 2005. The transaction valued at $9.35 million, according to the San Antonio Business Journal.
He also owns a restaurant in Three Rivers, Texas.
He appeared as a national TV spokesperson for Advil for several years, and still appears in Texas commercials, including those for Olshan Foundation Repair.
The money he receives for these commercials has not been disclosed publicly.
As we already know the Greenberg-Ryan group, also known as the Ryan Baseball Express LLC, is an investment group headed by Pittsburgh attorney Chuck Greenberg and Nolan Ryan.
Greenberg will serve as the managing partner and CEO of Rangers Baseball Express while Ryan will continue in his role as president.
Two other men that are the biggest financial players in the group, but not mentioned much in media coverage, are Ray Davis of Dallas and Bob Simpson. Both men are reportedly billionaires.
According to Forbes Magazine, Davis was an oil and gas energy co-CEO and board member for Energy Transfer Partners, L.P. He stepped down as co-chief executive in 2007 after 12 years and sold $600 million worth of stock, Forbes said. He still owns nearly 19 million shares in the company and he's worth roughly $1.2 billion.
Simpson is the co-founder of Fort Worth-based XTO Energy Inc. He served there for 23 years before it was acquired by Exxon Mobil this year.
Simpson walked away from his company with nearly $352 million worth of Exxon Mobil stock as well as a consulting package with them worth almost $40 million, according to a filing with the Securities and Exchange Commission.
Simpson also collected a cash payment of $10.8 million and retention payments of up to $25 million, according to the agreement with Exxon Mobil filed with regulators.
In 2008 alone, Simpson was compensated over $65.4 million as chairman of the board for XTO, according to Forbes.com.
As part of the Rangers purchase, Davis and Simpson will serve as co-chairmen of the board of the investment group, according to the Fort Worth Business Press.
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