FORT WORTH, Texas — The Texas Rangers' new arrival in bankruptcy court took an unusual turn Wednesday as Major League Baseball and some lenders got into a bidding war over interim financing plans and the leverage that can come with it.
U.S. Bankruptcy Judge D. Michael Lynn said he did not want to "conduct an auction" and team attorneys said they preferred proceeding with Major League Baseball for interim financing, though both offers include a $21.5 million loan.
The judge was expected to rule as early as Wednesday afternoon on the financing plan.
The Rangers filed for Chapter 11 protection on Monday, saying it would quicken the stalled $575 million sale of the team to a group of investors led by Pittsburgh attorney Chuck Greenberg and Hall of Fame pitcher Nolan Ryan, the Rangers' president.
Rangers chief financial officer Kellie Fischer testified that the team prefers the Major League Baseball offer because they been successful partners in previous financial matters. She also said the team liked the MLB's requirement — which is not in the lenders' offer — that the Rangers have a financing plan in place and the sale finalized by Sept. 15.
The Rangers want the sale completed quickly so they can have financial flexibility at the non-waiver trading deadline July 31. There is also the amateur draft in June, but the judge said this week that nothing will happen earlier than July 1 and in fact a July 9 hearing has already been scheduled in the case. There have been reports the Rangers will not go over slot for any draft selection's bonus demands.
Some of the team's top lenders have accused the Rangers of trying to speed up the bankruptcy process after approving the sale from Tom Hicks to a bidder that was not the highest.
The lenders also have criticized the Rangers plan, filed in bankruptcy court, to pay the $75 million of the club's debt tied up in Hicks' financially strapped ownership group. That would remove the team from the additional claims by creditors against Hicks Sports Group, which is not part of the bankruptcy filing.
In addition to the secured creditors, the team's top 30 unsecured creditors include Alex Rodriguez, who is owed $24.9 million in deferred compensation six years after he was traded.