Alex Rodriguez filed an objection in bankruptcy court last week over how the Texas Rangers' bankruptcy auction might be held, stating that he feared that bidders won't make good on deferred payments to him and other former team players.
On deadline for such filings before the Aug. 4 auction, an attorney for A-Rod noted that the Yankees third baseman is owed $24.89 million and complained that Hicks Sports Group, the team's parent, had failed to fund a $45 million escrow account for such deferred compensation, as required by Major League Baseball.
The original purchase agreement negotiated by club president Nolan Ryan and Pittsburgh sports attorney Chuck Greenberg's group would assume a debt of $204 million owed to all "approved," unsecured creditors, including the former players such as A-Rod. But bankruptcy judge Michael Lynn has said that new bidders are free to strip away any unwanted provisions which has alarmed A-Rod and other former team players who are owed millions as unsecured creditors in the Texas Rangers' Chapter 11 bankruptcy. But Texas Rangers' former players aren't the only creditors to object to the bankruptcy auction procedures, Major League Baseball (MLB) has already filed objections to the auction procedures saying that they fail to require that bidders acknowledge that the MLB has the right to disapprove any winning bidder and that the auction procedures fail to guarantee that the winning bidder guarantee that the MLB is repaid millions of dollars in loans it has given the Hicks Group since the company filed for Chapter 11 bankruptcy.
One MLB's biggest fears has been that it would lose the right to choose the owner of the baseball franchise during this Chapter 11 bankruptcy case. And while the bankruptcy judge has not explicitly stated that he will not honor MLB's right to choose the owner of the franchise, he must also be careful to protect the interests of all creditors involved in the bankruptcy.