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July 30, 2010

Judge rules auction will go forward even with enhanced Greenberg-Ryan bid

UPDATE: Although he said his preference was to approve a "substantially enhanced" bid that would enable Pittsburgh attorney Chuck Greenberg and Texas Rangers President Nolan Ryan to purchase the baseball team from beleaguered owner Tom Hicks, U.S. Bankruptcy Judge Michael Lynn ruled today the auction will go forward on Wednesday as scheduled.

Lynn said his ruling ultimately was based on satisfying the lenders "because it is their money," and after being assured by lawyers for Mavericks owner Mark Cuban and Houston businessman Jim Crane that their clients have had enough time to conduct due diligence and arrange financing for a bid.

The attorneys said their clients are ready, either separately or in tandem, to bid for the Rangers on Wednesday.

Cuban was unsuccessful in trying to buy the Chicago Cubs three years ago. And according to earlier reports, Crane might have difficulty being confirmed by MLB owners after his failed attempts to purchase the Cubs and Houston Astros. Both, however, have been approved to bid for the Rangers.

Lenders, who are owed $525 million by Hicks Sports Group, have objected to the Wednesday auction date, arguing it does not give bidders enough time. But Lynn said the auction needs to proceed because the Greenberg-Ryan will lose their financing on Aug. 12, "and I am not going to sink their bid."

FRIDAY MORNING

Here's the latest in the continuing, sometimes (often?) confusing saga of the Rangers' bankruptcy story:

William K. Snyder, the chief restructuring officer appointed by the court to try to work things out among the parties, has negotiated a "substantially enhanced" bid deal with Pittsburgh attorney Chuck Greenberg, who is working with current Rangers President Nolan Ryan to buy the team from beleaguered owner Tom Hicks.

The news was announced at a hearing Friday in federal bankruptcy court in Fort Worth.

All side deals -- which have been a sticking point for big lenders who questioned the fairness of the Greenberg-Ryan bid -- have been stripped out.

That apparently means that Hicks won't receive the $70 million he had negotiated to receive from Greenberg-Ryan for parking lots and a centerfield office building at Rangers Ballpark in Arlington.

If Judge Michael Lynn approves the new deal, which was negotiated without the knowledge of the other potential bidders, the auction scheduled for next Wednesday could be postponed or called off.

Greenberg's attorney, Tom Lauria, said the auction could simply be postponed for two weeks.

It's not yet clear if this means the end of the torture for Rangers fans. The hearing was continuing Friday morning.

Mavericks owner Mark Cuban and Houston's Jim Crane, two of the other possible bidders, aren't happy with the latest development. Nor are lenders at Monarch Alternative Capital, a New York-based private investment firm that specializes in lending to distressed firms.

Cuban's attorney, Clifton Jessup, attacked the new deal, saying that if the auction is held, Cuban would bid aggressively and possibly even beat the new terms. Crane's attorney said he has found new investors and is interested in making a bid, either alone or jointly with Cuban.

Jessup described the secret negotiations as an "October surprise" and said that even if Lynn doesn't approve the new deal, it will make an auction more difficult and "chill the bidding."

He said Cuban has spent hundreds of thousands of dollars doing his due diligence on the organization in anticipation of joining the bidding.

Snyder said he and Greenberg negotiated from Tuesday night to Thursday morning before striking a deal. He called the original deal, in which Hicks and Major League Baseball accepted the Greenberg-Ryan bid complete with the Hicks side deals, "a stinky process."

He said all the side deals had been removed without exception.

The terms of the new agreement are confidential and details were vague, but the cash amount of the new bid is apparently at least $40 million higher than the previous Greenberg-Ryan offer, which would bring the cash price close to $350 million.

The lenders say they are owed $525 million by Hicks' parent company, Hicks Sports Group, and they pushed to reopen the bidding process after the team declared Chapter 11 bankruptcy and sent the matter into court.

When Greenberg-Ryan agreed to buy the Rangers in January, they gave Hicks a side deal worth about $70 million for parking lots, a centerfield office building and other assets around Rangers Ballpark in Arlington.

Hicks has said that the real estate holdings are separate from the team and weren't used as collateral on his sports loans.

-- Barry Shlachter

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Comments

Who cares about "side Deals" just get the deal done so teh Rangers can concentrate on winning the AL championship. All these big money deals are full of uncouth shenanigans anyway. Its like a player agreeing to a contract for 5 years then wanting to renegoiate after three or four years after they have already gotten their signing bonus.

I sure hope for all us fans this works. If the auction gets pushed back, again, I'm going to be pretty upset.

Please do whatever it takes to get this new deal done and KEEP CUBAN OUT!

So if the Rangers are sold, but Hicks still owns all of the parking lots, what is to prevent Hicks or whomever he sell the land to from building on those lots and eliminating the parking at the Ballpark? Since Arlington has no mass transit, will we all have to park at the JerryDome and hike our way to the games? Or will Hicks keep the lots and charge $60 to park like the neighbors down the street? Seems like whoever buys the team would want to have control over the parking lots.

I would like to see a list of the creditors involved. I am only one guy here, but I would gladly stop doing business with these companies and encourage Ranger fans to do similarly. They took the risk with Tom Hicks, let them get their money from him. Enough corporate entitlement, they gambled and lost. Time to move on big boys.

Whatever it takes to get Nolan Ryan in the owners seat is OK with me. Cuban needs to back off and Crane would move the team to Houston or San Antonio so get him out of it. Cuban might move them to Indianapolis... Just get the deal done and lets ride this Express to the World Series....

we need to do anything from keeping cuban from owning this team. He's a JOKE he's turned the Mavericks into the laughing stock of the NBA with all his crying about the Referee's calls.Could you see him whinning about a ball or strike call. The ump would throw him out of the game. Ryan-Greenburg is our best bet. Good riddance to Hicks and his shady deals.

Cuban knows nothing about baseball. He doesn't even know the words to Take Me Out to the Ballgame (see YouTube).

First thing he would do, like he did with the Mavericks, is replace Chuck Morgan with some screamer as PA man.

Why is he suddenly interested in the Rangers, anyway, after turning up his nose on them all these years?
Keep Cuban out.

Thomas got a shocker for you, BOTH San Antonio and Houston have baseball teams. In fact before they were the lowly Texas Rangers, the Houston Astros were in existance. The Astros have been where your Rangers have never been...,The World Series

whoop-de-do "Glad not a DFW Fan", so the Astros have one more second place finish than the Rangers do in 45 years. That's really one to hang yo hat on cause everyone always remembers and cares about who finishes 2nd. Color me impressed! other than that brief moment of mediocrity, your track record is as bad as the one in Arlington is, with a future far more dismal. enjoy!

Just the fact that Cuban now owns some of Tom Hicks' debt should make him ineligible to bid on the team--conflict of interest, you know.

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