Ryan's group sues Rangers
FORT WORTH, Texas -- The group backed by Major League Baseball to buy the Texas Rangers sued the team on Monday, hoping to force the long-delayed sale and put a halt to the fresh round of bidding that was opened up unexpectedly in the team's bankruptcy case.
The lawsuit filed by Hall of Fame pitcher and team president Nolan Ryan and Pittsburgh sports attorney Chuck Greenberg accuses the Rangers of breaching their purchase agreement with the group. It is the latest twist in a complicated and occasionally ugly fight over the Rangers, who are in first place in the American League West and hoping to reach the playoffs for the first time since 1999.
Galloway & Co.: 7/12
Sports Corp sports consultant Marc Ganis joins GAC to shed some light on the confusing legal tales of the Texas Rangers.
Selling the team to the Greenberg-Ryan group and paying creditors $75 million was part of the Rangers' bankruptcy plan when it filed for Chapter 11 protection in May after angry lenders had blocked the team's sale for months.
The Greenberg-Ryan group, Rangers Baseball Express, was chosen after a bidding process that started last summer with six bidders, according to the suit. After being selected, the group even raised its offer by $10 million because the team was still negotiating with other interested buyers before the agreement was signed in January, the suit alleges.
Although Rangers Baseball Express recently put money into an escrow account to allay creditors' concerns, the team filed for bankruptcy as a way to speed up the sale.
The suit accuses the court-appointed restructuring officer, William K. Snyder, of trying to "hijack" the bankruptcy case by recommending that the team reopen negotiations with other bidders.
"The [chief restructuring officer] was never provided with any authority to take over this bankruptcy case by ... soliciting new bids, modifying agreed-to bidding procedures or taking any of the actions he is now threatening to take in an attempt to hijack the proceedings," attorneys wrote in the lawsuit.
After Snyder said he would approve the Rangers' bankruptcy plan only after an auction, Greenberg and Ryan's group agreed to waive its exclusivity rights on July 5 on the condition that certain bidding procedures be used.
Major League Baseball would have decided who was eligible to bid and then required a $1.5 million deposit and an opening bid of more than $500 million. The league -- which endorses the Rangers Baseball Express bid -- could have rejected the highest bidder and selected the runner-up instead.
Last week, Snyder assured Rangers Baseball Express that it had "ultimately the best bid" and said he would probably vote for the team's plan even without additional bidding, according to the suit.
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But Rangers Baseball Express found out Snyder was still talking to other parties and was considering making a deal with one of them, the suit alleges. In fact, one interested buyer attended last week's mediation session after being invited by Snyder -- who, along with the team, started negotiations with that bidder, the suit alleges.
Last Thursday, Snyder suddenly rejected the bidding procedures and the team withdrew its request for a July 16 auction that Rangers Baseball Express had hoped to win.
The lawsuit argues that because bidding terms were not in place, the exclusivity rights remained in effect in the Rangers Baseball Express' purchase agreement with the Rangers -- and the team is violating that agreement by soliciting and negotiating with other interested buyers.
A confirmation hearing on the Rangers' bankruptcy plan was set for July 22, where Snyder was to make his recommendations to the judge. It's unclear if that hearing will change in light of Monday's lawsuit.
Copyright 2010 by The Associated Press
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