Could Texas Rangers End Up In Bankruptcy?
Who could imagine a professional baseball team going into bankruptcy? Well, it might just happen with the Texas Rangers, a team with an owner that has major financial problems.
Tom Hicks built himself a very nice sports empire. He owned or owns the Dallas Stars NHL team, the Texas Rangers baseball team and a part of the Liverpool Football Club, a huge team in England. Alas, he came to own most of the teams based on favorable funding deals with creditors. Then things went sour and he ran into huge money problems.
Experts Your Questions Now.
Of his teams, the Texas Rangers clearly were given the short end of the stick. The team hasn’t been successful in a long time, while the Stars and Liverpool have seen their share of success. Given this, it was hardly a surprise that the Rangers were reported to barely have enough money to order baseballs and the like. The subsequent announcement that the team would be put up for sale was about as shocking as the news the sun came up this morning.
Hicks sold the Rangers to a group led by Nolan Ryan, an iconic pitcher. Fans were happy and so was Major League Baseball. Then the problems started. The sales price did not come close to satisfying the debts owed to creditors. It was essentially a short sale of the team. Now the deal is in trouble and many wonder what is going to happen. One result could be the league seizing the team and forcing the creditors to settle for cheap. The other is an involuntary bankruptcy.
From A Bankruptcy Lawyer Now.
An involuntary bankruptcy can happen when three or more creditors file to push a business or person into bankruptcy court. Why would it happen in this case? Well, the creditors would be able to theoretically open up the bidding for the team again. More bidders would drive up the price and give the creditors a better chance of recovering their investment.
Will the Texas Rangers end up in bankruptcy? It seems unlikely. The owner of the Phoenix Coyotes of the NHL tried this the year before and it didn’t work out well. The court held the restrictions set by the league were valid and the league ended up with the team while the previous owner and creditors were hammered.