The involuntary bankruptcy petitions, filed in Fort Worth against Rangers Equity Holdings LP and Rangers Equity Holdings GP by four hedge funds, comes days after the team put itself voluntarily into bankruptcy to ease a proposed $575 million sale to a group led by team president and Hall of Fame pitcher Nolan Ryan.
The Rangers’ equity owners, controlled by Hicks’ HSG Sports Group, were not part of the team’s May 24 “prepackaged” bankruptcy filing. Lenders to the Hicks group declared default on $525 million of loans in April 2009. HSG acquired the team in 1998.
The court action on Friday may signal that some of the team’s lenders are dissatisfied with the terms of the proposed sale.
The petitions “are intended to ensure that the bankruptcy proceedings meet the objective of maximizing value for all creditors,” a spokesman for the lender group said. The lenders had told the court on May 25 that they might take such an action, he said.
Petitioners, who said they were owed a collective $144.4 million, include hedge funds Kingsland Capital Management ($12.2 million); Monarch Master Funding LLC ($119.8 million); Sankaty Advisors LLC ($9.1 million); and Stonehill Offshore Partners Ltd ($3.3 million). All said their claims are secured.
Major League Baseball, Nolan’s group, and Hicks have all said they support the sale.
But earlier this month, The New York Times said Monarch told baseball owners that lenders would not agree to a sale for a price “below fair market value.”
The Rangers are the second Major League Baseball team to seek a bankruptcy-court-approved sale in the past year.
Last October, Chicago Cubs owner Tribune Co, which had been in bankruptcy court itself for nearly a year, filed for court protection for the team in connection with the Cubs’ $845 million sale to the family of TD Ameritrade Holding Corp (AMTD.O) founder Joseph Ricketts and his son, Tom Ricketts.
The cases are In re: Texas Rangers Equity Group LP, No. 10-43624 and Texas Rangers Equity Group GP, No. 10-43625, both in U.S. bankruptcy Court, Northern District of Texas. (Reporting by Ann Saphir in Chicago, with additional reporting by Emily Chasan in New York; Editing by Eric Walsh)