June 22, 2010 3:55 PM

Rangers Bankruptcy Judge Rules in Favor of Creditors, Team's Sale on Hold

Posted by Brian Baxter

A U.S. bankruptcy judge presiding over the Chapter 11 case of the Texas Rangers baseball team has ruled that a long-awaited sale of the franchise cannot proceed until creditors approve a prepackaged bankruptcy plan, according to the Dallas Observer.

Judge Michael Lynn's opinion determined that an ad hoc group of secured creditors were impaired in their attempts to receive interest payments on $75 million in debt held by the Hicks Sports Group, the entity controlled by current Rangers owner Thomas Hicks, whose debt troubles have forced him to begin selling off his sports assets. (Click here for Lynn's 28-page ruling, courtesy of the Observer.)

"The court will not direct any changes to the [bankruptcy] Plan," Lynn wrote in his opinion. "However, unless the treatment of the Lenders is modified, the Plan (as modified to date) will not be confirmable absent acceptance by the Lenders, the only class of creditors that is impaired under the present iteration of the Plan."

An amended prepackaged plan of reorganization for the Rangers was filed with the bankruptcy court in Fort Worth on Tuesday.

Several Am Law 200 lawyers are involved in the Rangers bankruptcy case, including Pepper Hamilton sports practice head Charles Greenberg, who is part of a new ownership group that's been cooling its heels for months waiting to take over the team.

Contact Brian Baxter at [email protected].

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