UPDATE 4-Texas Rangers file bankruptcy, Ryan group to buy

* Texas Rangers file for Chapter 11 bankruptcy protection

* Ryan-led group to pay Hicks group $575 mln

* Alex Rodriguez is largest unsecured creditor -filing
(Adds impact of recession on Hicks, paragraphs 12-13)

By Jonathan Stempel

NEW YORK, May 24 (BestGrowthStock) – The Texas Rangers baseball
team filed for Chapter 11 bankruptcy protection on Monday to
ease the sale of the team to a group led by team president and
Hall of Fame pitcher Nolan Ryan for about $575 million.

The voluntary filing calls for creditors to be paid in
full, and has the support of Major League Baseball, current
Rangers ownership and Ryan’s group.

Texas Rangers Baseball Express, the group led by Ryan and
his partner Chuck Greenberg, a Pittsburgh-based lawyer at
Pepper Hamilton LLP, is also buying the lease for the Rangers’
Ballpark in Arlington, as well as nearby land.

A sale could break a stalemate between team owner Thomas
Hicks and his lenders that has existed since January, when
Ryan’s group agreed to buy the team. It is unclear whether
creditors favor the plan, which the Rangers called
“pre-packaged.”

The team said the plan would fully pay Rangers creditors,
and allow them to recover all debt issued by Hicks’ HSG Sports
Group and guaranteed by the Rangers.

Kellie Fischer, the debtor’s chief financial officer, in a
court filing said “there are no impaired classes of creditors
or equity holders” under the bankruptcy plan.

HSG bought the team in 1998 from investors including
then-Texas Governor George W. Bush. Hicks co-founded private
equity firm Hicks, Muse, Tate & Furst Inc.

The bankruptcy filing is “the best way to complete the sale
and smoothly transition to new ownership, which we expect will
occur by midsummer,” Ryan, 63, said in a statement. He said the
bankruptcy will not affect day-to-day operations.

In a statement, Baseball Commissioner Bud Selig added that
the filing “serves the best interests of the team, its fans,
Major League Baseball and all other parties.”

The Rangers filed for protection from creditors with the
U.S. bankruptcy court in Fort Worth, Texas.

Alex Rodriguez, now the New York Yankees’ third baseman, is
the team’s largest unsecured creditor, the filing shows.

LENDERS

According to court records, the Rangers have experienced
cash flow shortfalls since 2005, and the global recession left
Hicks unwilling to sustain his financial support for the team.

Hicks fell off Forbes magazine’s annual list of
billionaires in March. He is also trying to sell his
half-interest in the English Premier League’s Liverpool soccer
club.

Lenders to the Hicks group had declared a default on $525
million of loans in April 2009.

Earlier this month, The New York Times said the top lender,
Monarch Alternative Capital LP, told baseball owners that
lenders would not agree to a sale to Ryan’s group “at a price
below fair market value.”

Monarch, a New York-based hedge fund firm with about $3
billion under management, had no immediate comment.

“This probably represents that Monarch was continuing to
play hardball,” said Robert Jarvis, a sports law professor at
Nova Southeastern University in Florida. “It sounds like a
voluntary bankruptcy to get Monarch off the Rangers’ backs and
allow the sale that Major League Baseball wants.”

CUBS ALSO FILED BANKRUPTCY

The Rangers are the second Major League Baseball team to
seek bankruptcy protection in the last year.

In October, the Chicago Cubs filed for court protection in
connection with the team’s $845 million sale by Tribune Co
to the family of Tom Ricketts, whose father founded the
brokerage TD Ameritrade Holding Corp (AMTD.O: ).

Forbes magazine last month estimated the Rangers and the
ballpark lease were worth a combined $480 million.

According to the bankruptcy filing, the debtor has between
$100 million and $500 million of assets and between $100
million and $500 million of liabilities. Hicks would become
Rangers chairman emeritus if the team’s sale went through.

Rodriguez signed a 10-year, $252 million contract with the
Rangers in 2000. The team traded him to the Yankees in 2004,
but agreed to pay an estimated $67 million of the balance due.

Scott Boras, the agent for Rodriguez, declined to comment.

Ryan pitched in the major leagues for 27 years, including
five for the Rangers, and holds the career strikeout record.
Known as the “Ryan Express,” he retired after the 1993 season.

The case is In re: Texas Rangers Baseball Partners, U.S.
Bankruptcy Court, Northern District of Texas, No. 10-43400.

Stock Research Tools

(Reporting by Jonathan Stempel in New York; Additional
reporting by Santosh Nadgir in Bangalore; Editing by Robert
MacMillan, Gerald E. McCormick and Matthew Lewis)

UPDATE 4-Texas Rangers file bankruptcy, Ryan group to buy