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Pro-Baseball's Texas Rangers File for Bankruptcy 5/26/2010

On Monday, May 24, 2010, MLB's Texas Rangers filed a petition for voluntary bankruptcy under Chapter 11 of the United States Bankruptcy Code.  The filing is considered by many commentators as a strategy to facilitate the sale of the team to a group of investors headed by former Texas Ranger Nolan Ryan and his partner, Chuck Greenberg, an attorney with Pepper Hamilton LLP based in Pittsburg.  It appears that most, if not all, of the creditor of the Texas Rangers will be paid however legal maneuvering is ongoing and the various legal teams for the creditors are moving aggressively to protect the interest of their clients. 

The bankruptcy and proposed sale appears to have the blessing of the MLB as it may result in the sale to a former MLB legend and no creditors appear to be impaired by the filing.  The purchase and sale of the team is estimated to occur at a price of $575 Million.

The current owners of the team, HSG Sports Group, purchased the team in 1998 from a group of investors consisting, in part, of former US President and former Governor of Texas, George W. Bush. 

The largest unsecured creditor of the Houston Texans is New York Yankee's All-star Alex Rodriguez resulting from his trade to the Yankees.  It has been alleged that the Texans owe Rodriguez roughly $25 Million.  The bankruptcy is not expected to impair his recovery at this time.

This bankruptcy marks the second bankruptcy of a professional baseball franchise in the past 12 months.  In October, the Chicago Cubs filed for bankruptcy to facilitate the sale to an entity lead by the founder of TD Ameritrade

(http://www.reuters.com/article/idUSN249464520100524)

 

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