Annoyed and disgruntled creditors are monkey-wrenching plans for an August 4th auction of baseball’s Texas Rangers. The creditors are not pleased with the bidding process and its procedures, contesting the team’s ballpark’s lease should be “severed from the sale” itself.
Bankruptcy Judge, D. Michael Lynn allowed a motion to seal the creditors’ request to “reconsider the bidding procedures” which are managed by Major League Baseball. In addition to approving procedures, Judge Lynn made alterations such as delaying the auction for another two weeks in order to allow potential buyers time to make financial decisions.
Meanwhile, Major League Baseball’s lawyers noted the creditors’ motion did nothing but reiterate arguments previously rejected by the judge. Judge Lynn scheduled a hearing to re-consider creditors’ objections in addition to potentially ruling on another lawsuit filed by creditor JP Morgan Chase Bank, which seeks to remove the Rangers’ ballpark lease from the sale entirely.
JP Morgan finds fault with the Rangers’ parent company for transferring the lease to the team, just prior to its bankruptcy filing—without the bank’s approval, which was required in its original loan agreement. Therefore, the bank argues the ballpark lease is not the team’s property.
Should Lynn rule in favor of the bank, the ballpark would be removed from the deal—which could potentially scare away buyers. “It could be detrimental,” said bankruptcy attorney, Jason T. Rodriguez. “A bidder wants a package wrapped up with a bow on top, and removing the ballpark lease would take away a critical part of the deal.”
The Rangers filed for Chapter 11 protection and had devised a plan to repay its lenders $75 million and then sell the team to a group headed by Hall of Fame pitcher, and Rangers’ president, Nolan Ryan. However, the Rangers’ purchase agreement with this group (which has so far bid roughly $575 million) includes the ballpark lease.