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Steps taken to facilitate Rangers sale

Steps taken to facilitate Rangers sale

ARLINGTON -- The Rangers are headed for bankruptcy court in an attempt to expedite the sale of the club from current owner Tom Hicks to a group headed by Pittsburgh attorney Chuck Greenberg and club president Nolan Ryan.

The motion was filed on Monday in United States Bankruptcy Court for the North District of Texas, Fort Worth division. Greenberg's group bought both the Rangers, the lease to Rangers Ballpark, and, in a separate transaction, adjacent land for a total value of $575 million.

A preliminary agreement was reached on Dec. 15. A final agreement was reached on Jan. 23 but has been held up by the lending institutions that hold approximately $525 million of debt from the Hicks Sports Group.

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"Things have gone downhill from there and we've reached a total impasse with the creditors," Hicks said. "About a month ago, my legal team and I concluded that this is the only way to break the impasse and allow the Texas Rangers to be sold to the investment group. I did not want to put the future of Texas Rangers baseball in jeopardy."

The Rangers, as an entity, are responsible for $75 million of the Hicks Sports Group debt that is held by lending institutions. The sale can't be completed until that debt is paid and the lien is lifted.

The motion filed in bankruptcy court is designed to get the Rangers out from under the liens, have the $75 million in debt paid off and have the sale of the ballclub approved to the Greenberg group. Judge D. Michael Lynn will have the ultimate decision on what happens with the Rangers.

"It's time to get the show on the road," Greenberg said.

Hicks, Greenberg and Ryan are hoping this will be done before the July 31 Trade Deadline comes around so that the new ownership group will add the financial resources needed to allow the Rangers to be active at the critical point in the season. The Rangers entered Monday in first place with a two-game lead in the American League West.

The Rangers have been operating under a strict budget the past year, and that's not going to change until the sale is completed.

"We have been paralyzed on the business side, and this will allow us to go forward," Hicks said. "This is a path that we believe will result in finality within a reasonable, short period of time. I think 30 days, six weeks, two months outside ... hopefully by the All-Star break."

Greenberg made it clear that the new ownership group is prepared to operate under a significantly larger budget that will allow more payroll flexibility as far as making trades.

The First-Year Player Draft is also coming up in June, and July 2 is the first date that clubs can officially begin signing amateur free agents in Latin America.

"We have some deadlines coming up that are important to us as a ballclub," Ryan said. "We feel like bringing this to a finality ... we can then be able to do the things that we feel like we need to do and push forward in the winning ways of the ballclub.

"We're very excited about the season we're having. We feel like it's important to get this ownership situation resolved so we can move on to another era."

Ryan made it clear that the team still has a sufficient budget to sign players from the upcoming Draft. The Rangers have two first-round picks and four of the top 50 picks overall.

"We have budgeted for where we think we should be and we're comfortable paying kids with where we're drafting," Ryan said. "It doesn't matter if we have the money if we don't feel like it is prudent to spend our money in that way. If a kid asks for [a certain amount of] money, that doesn't mean we're going to do it whether we operate under this budget or the new budget."

Part of the proceeds from the sale will also be set aside to assume the Rangers' other debt obligations. Most significant is deferred compensation to former players, including almost $25 million still owed to Alex Rodriguez and almost $13 million still owed to Kevin Millwood.

There are other debts that need to be addressed, but when the sale is completed, about $280 million will go to Hicks Sports Group. That money will also be used to address the approximately $525 million total debt that HSG owes its creditors.

That total is unlikely to satisfy the creditors, who have been unhappy with the total sale price and that the money from the sale of the land is not being used to help pay off the debt. There have been suggestions that other groups would have offered more for the Rangers, although that has not been firmly established.

It is likely that the dispute between HSG and the creditors may continue.

"Even though a couple of these renegade creditors have behaved like this, I'm not expecting an overnight personality transplant," Greenberg said. "The odds are that they won't take this well. But the fundamental problem that they have is that the Rangers are going to be satisfying 100 percent of the franchise's obligations.

"Once you satisfy all of the obligations of the company that's in bankruptcy, that's pretty much the end of the story. They may very well react in a noisy fashion, but the bottom line is the Rangers are satisfying all of their obligations."

The bankruptcy filing is intended to remove the team from the process and allow the sale to be completed. The Rangers have requested that a hearing be held in 45 days to confirm the proposed sale and plan of reorganization.

The sale must still be approved by Major League Baseball in a vote of 75 percent of the other owners. Commissioner Bud Selig has given his support to the Greenberg group, and his office has worked tirelessly to get this matter resolved.

"This plan to complete the sale of the Texas Rangers serves the best interests of the team, its fans, MLB and all other parties involved," Commissioner Bud Selig said in a statement. "This agreement assures an orderly process to expeditiously transfer Rangers ownership to the Greenberg-Ryan group, and it protects the franchise's baseball operations."

T.R. Sullivan is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.

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