If you thought the Texas Rangers bankruptcy drama had ended, it seems that it is just getting started. Most recently bankruptcy judge Michael Lynn quipped that "This is like one of those baseball movies where the players get stranded," after convincing Chase to keep the baseball team's credit card active while they played in Kansas City. The attorneys representing Chase and other lenders in the disputed Chapter 11 bankruptcy of the Texas Rangers indirectly accused the team of bankruptcy fraud by suggesting that their the bankruptcy filing was part of a manufactured crisis orchestrated by Tom Hicks.
The Rangers filed for bankruptcy Monday to free the franchise of liens from lenders who oppose the Greenberg-Ryan deal that was struck with owner Tom Hicks back in January. Hicks is asserting that the team itself is responsible only for $75 million of the $550 million loan to the Hicks Sports Group, on which it defaulted in March 2009.
Four big lenders --Monarch Alternative Capital, Kingsland Capital Management, Sankaty Advisors and Galatioto Sports Partners -- insist that they should get far more from the Rangers' sale and Dunne suggested in court that they could force two HSG entities into a separate involuntary bankruptcy.
If the group of lenders are able to force Hicks Sports Group into a separate Chapter 11 bankruptcy, it could reveal exactly how much of the debt the Texas Rangers is responsible for and give the lenders more leverage in the Texas Rangers Chapter 11 bankruptcy. However, at this point it looks unlikely that they would be successful in their efforts to separate the bankruptcy. Already, the bankruptcy judge in this case has sided with the debtor in allowing them to move forward with the bankruptcy financing lender of their choice. But on June 15, the bankruptcy court will hear all sides of this bankruptcy.