With Bankruptcy Ruling on Horizon for Texas Rangers, Could Potential Stars Sale Still be Affected?

Later this morning, Judge D. Michael Lynn is expected to issue a ruling in the Bankruptcy case involving the sale of the Texas Rangers.

Obviously, sports fans here in Dallas/Fort Worth who have followed the entire process of the Rangers sale, thanks in large part to Adam J. Morris at LoneStarBall and Murray Brown at the Biz of Baseball, will be hitting up both blogs right around 11:00 in the hopes that Judge Lynn not only approves the sale of the club, but also approves their plan of debt repayment, which would total about $219 million according to an amended repayment plan on Friday.

If he does, that would effectively remove the only obstacle to a sale of the Rangers. Oh sure, the creditors will likely ask for a stay or an appeal if that decision is handed down. But according to Murray Brown, the chances of the creditors winning a stay or appeal are exceptionally small.

And everything that's occurred in the case, from this:

During the hearing on Tuesday, Judge Lynn said from the bench that garnering the highest bid through the bankruptcy process was not necessary.

Martin Sosland, a lawyer for the Rangers said after going over details on the bankruptcy code that are based upon the lien against the club, "They're entitled to $75 million, and they go away," Sosland said.

Judge Lynn sided with Sosland saying, "I'm inclined to agree with your position on the maximization of value. At this point, you're ahead on that one."

To this...

In a related matter on Thursday, U.S. Bankruptcy Judge D. Michael Lynn, said that the Rangers may continue to use Perella Weinberg Partners as an investment banker and Weil Gotshal & Manges LLP as legal counsel. The US Trustee, the arm of the Justice Department  that has oversight in bankruptcy matters has claimed that there is a conflict of interest in those two firms working with the Rangers given that they had worked with Tom Hicks prior.

"Any further advisements Weil Gotshal feels it should be making should be made one week from today," Lynn said. He added that if the firm fails to disclose something, it does so "at its own peril."

...would indicate it's OK to breathe a sigh of relief if you're a Stars fan, right?

Well, not quite. Because as Bill Siegel reports, there's still the chance that Judge Lynn could approve the sale of the club, but could open up Hicks Sports Group, the entity that initially defaulted on the $525 million loan, as a target for the creditors.

UPDATE (4:51pm ET) - In a "Closing Bell" report on the Sports Business Daily, Bill Siegel, a bankruptcy attorney with Cowles & Thompson, suggested that if Judge Lynn sides with the Rangers, but sees that the holding companies of the Rangers, such as Hicks Sports Group, could be a more correct target, an emergency filing to stay on the sale to a nearby federal district court

So if that does happen, what are the chances that, just like with the Rangers, the fate of the Stars ownership falls into the hands of a judge in a bankruptcy court?

I'll analyze that after the jump.

I'll preface this by saying I'm not a lawyer of any kind. I'm only approaching this from the angle of a concerned sports fan who wants Tom Hicks out of his life as quickly as possible.

And yes, there are some similarities to how the sale of the Rangers has played out thus far to where the state of the Stars sale stands. Namely, that there are at least two groups still involved in the bidding process. Third, if Billy Quinn is still involved.

Those comparisons would certainly continue if Hicks follows the same path he took with the Rangers and selects a bid that is significantly lower than the highest bid. But I think the similarities would end there.

For one, Hicks was almost cornered into accepting the Greenburg bid for a couple of reasons. One, it was the only bid in which Nolan Ryan would still remain with the club. Say what you want about Tom. But I do think a large part of him wanted to ensure Nolan would remain with the group from the get go to ensure a seamless transition of power with the Rangers.

As you compare this to the Stars, I'm sure you could make the argument that as the face of the franchise on the ice for so many years, Mike Modano would command the same amount of respect that Nolan commands with the Rangers.

Difference is, Ryan is more than just the face of the franchise of the Rangers. He's also the club's president and is involved in the day-to-day operations of the ball club.

There's no indication that Modano would take on any greater role with the Bill Quinn group, aside from attracting potential investors to the Stars.

Second, there was no way in hell that Major League Baseball was going to allow Jim Crane into it's exclusive club of owners after the Houston businessman reneged on a deal to purchase the Houston Astros from Drayton McLane.

Tom Galgardi might have raised a few eyebrows when he stated his interest in purchasing the Atlanta Thrashers was with the intention of moving them to Hamilton in a Jim Balsillie-like move. But unlike Balsillie, Galgardi has never flaunted NHL rules of ownership like Balsillie has. And I doubt, like Brad, that his interest in purchasing the Stars is predicated on moving them to Canada.

The Stars are entrenched as one of the most successful teams in the southern U.S. They're simply not going anywhere.

And for good measure, let's say Hicks is rather successful with this endeavor of using the bankruptcy court system to facilitate the sale of the Rangers. He could use that victory as leverage over any claims any creditor might have over the winning bid in the Stars sale.

Of course, Hicks could avert a repeat of this nonsense by selecting the highest bid available, thus, robbing the creditors of the same leverage that allowed them to push the Rangers sale into bankruptcy.

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