The Texas Rangers stepped closer to exiting federal bankruptcy protection Thursday, hours after Hall of Fame pitcher Nolan Ryan's group purchased the team at an unusual marathon auction.
A judge was expected to approve the team's bankruptcy plan Thursday, which would clear the way for Major League Baseball to formally approve Ryan and sports attorney Chuck Greenberg as the team's new owners next week.
The court-appointed restructuring officer and creditors who had opposed the plan said they now supported it because the auction was a fair and open process that resulted in a higher price for the 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 also 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 say most 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 a showdown with Dallas Mavericks owner Mark Cuban just before 1 a.m. for the AL West-leading Rangers. 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. He said he wanted to thank Cuban, who "stepped aside with grace when the time came."
The Greenberg-Ryan group have had Major League Baseball's endorsement since being named 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.