Texas Rangers to file for Bankruptcy

[Balta1701]

The Texas Rangers, the Major League Baseball team controlled by billionaire Thomas Hicks, filed for bankruptcy to facilitate a sale to investors led by team president Nolan Ryan and his partner Chuck Greenberg.

 

The Arlington, Texas-based ballclub listed assets and debt of between $100 million and $500 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Fort Worth, Texas.

 

Alex Rodriguez, now the third baseman for the New York Yankees, was listed as the Rangers’ top unsecured creditor.

 

“I want to assure all our fans that this process will not affect the day-to-day management of the team as we continue to compete for a playoff spot in 2010,” Ryan said in a letter to fans posted on the team’s website.

 

The club is the second Major League Baseball team to enter bankruptcy in less than a year after the Chicago Cubs in October joined owner Tribune Co. in Chapter 11 as part of that team’s sale.

 

The team has asked the bankruptcy court to approve the sale at a hearing in 45 days, according to a posting on the team’s website. The sale should be completed by mid-summer, Ryan said.

Link

[knightni]

There goes the Oswalt speculation... unless they send $$ players back to Houston.

[southsider2k5]

I wonder if this means the Yankees won't get all of that Arod money now?

[NorthSideSox72]

I wonder if this means the Yankees won't get all of that Arod money now?

Is A-Rod still on the TEX contract? If so, it, like every other contractual obligation of the Rangers, will now be subject to the filings and hearings associated with the bankruptcy. So it could go either way.

 

[Balta1701]

Is A-Rod still on the TEX contract? If so, it, like every other contractual obligation of the Rangers, will now be subject to the filings and hearings associated with the bankruptcy. So it could go either way.

3rd paragraph above:

Alex Rodriguez, now the third baseman for the New York Yankees, was listed as the Rangers’ top unsecured creditor.

[NorthSideSox72]

3rd paragraph above:

LOL, if that contract is the highest unsecured debt on the Rangers' book, I'd say there is a 95% chance that the Rangers will exit the contract, forcing NYY to either take full assumption, or dump the contract entirely. And no way they do the latter, even though legally I think they could, since the contract counterparty defaulted.

 

The only reason I could see that the contract would survive the proceedings as-is, is if the Rangers want to hold onto inter-team credibility, and not lose that political capital.

 

[greg775]

Put this in layman's terms?

How can a team be bankrupt if it is worth zillions?

If you go bankrupt, doesn't that mean you have no worth and your credit card companies are out of luck?

What does this mean for a baseball team? Why does the government allow them to declare bankruptcy when they are worth lots of money??

[knightni]

Put this in layman's terms?

How can a team be bankrupt if it is worth zillions?

If you go bankrupt, doesn't that mean you have no worth and your credit card companies are out of luck?

What does this mean for a baseball team? Why does the government allow them to declare bankruptcy when they are worth lots of money??

How can a company go bankrupt if they are worth billions?

 

Their debts more than out-number their income.

 

They have 100 mil profit and 300 mil loss. Tom Hicks is a financial idiot.

 

Someone else can fill in the other answers.

[SoxFan562004]

Is A-Rod still on the TEX contract? If so, it, like every other contractual obligation of the Rangers, will now be subject to the filings and hearings associated with the bankruptcy. So it could go either way.

the whole A-Rod contract thing was weird, I thought when he opted out it basically ended that Rangers contract, maybe it's some deferred money they owe him or it survived in some capacity.

[chw42]

I find it surprising that they have a $55 million payroll...

[SoxFan562004]

I find it surprising that they have a $55 million payroll...

good point. Considering the other payrolls, they are a good team for $55m. Thinking about it it makes some sense, they have some quality players, but they're all kind of young and Vlad didn't cost a ton in the off-season.

[NorthSideSox72]

How can a company go bankrupt if they are worth billions?

 

Their debts more than out-number their income.

 

They have 100 mil profit and 300 mil loss. Tom Hicks is a financial idiot.

 

Someone else can fill in the other answers.

A company "worth" billions won't go bankrupt, more than likely. If they were "worth" that much, they would have no need to. They may have billions in assets however, which is not the same thing.

 

Also, most companies' debts are greater than their income - that's not really a determining factor. Usually its that the SERVICE on debt is more than they can handle, as well as other factors such as debt/asset ratios, income ratios related to future cash flows and pending debt payments, etc.

 

And you cannot have 100 million in profit and 300 million in losses - that would simply be 200 million in losses, no profit.

 

Greg775, you have to understand a couple things. One, USUALLY, a company goes into bankruptcy to get out from under debt in some form or another. By going through bankruptcy, they can typically clear themselves of most debt obligations, as well as any other contractual obligations, that would put the company in financial peril. And going bankrupt does not have to mean liquidating and going out of business - it basically means crying "mercy", and starting over. Its not that simple really, because there are all sorts of negative consequences, but I am trying to generalize here.

 

In this SPECIFIC case, much like with the Cubs and TribCo, sometimes they may go through bankruptcy to restructure and make themselves appealing to a buyer.

 

[JorgeFabregas]

I'm trying to figure out how I can pin this on Dubya.

[southsider2k5]

I'm trying to figure out how I can pin this on Dubya.

 

So how is life in the White House?

[Balta1701]

So how is life in the White House?

Shouldn't you be blaming Clinton?

[JorgeFabregas]

I thought that I read on mlb.com that they would pay all player contracts including deferred payments to former players. Not so?

[DBAHO]

Tom Hicks has basically been screwed by the Credit Crisis.

 

Him and George Gillett bought Liverpool (a big 4 EPL team) 3-4 years ago and borrowed a lot of money to do so, and now they are desperately trying to sell that as well.

 

Financial mismanagement as it's best.

[greg775]

Thanks for the info. I wish I was more of an economics whiz.

[Balta1701]

From our old friend Darren Rovell (@DarrenRovell1), of CNBC fame:

 

Best part of Rangers bankruptcy? That they still owe Mickey Tettleton (last played in '97) $1.4M!

 

Stark

[Balta1701]

As a major creditor, Alex Rodriguez has filed an objection to the Rangers current bankruptcy settlement plans.

[HuskyCaucasian]

As a major creditor, Alex Rodriguez has filed an objection to the Rangers current bankruptcy settlement plans.

I expected this eventually. he's gonna get hosed out of a lot of money.