Angry creditors urged a federal bankruptcy judge Tuesday to delay next month's auction of the Texas Rangers, saying potential buyers need three to four months to secure financing - jeopardizing the sale to Major League Baseball's preferred buyer.
In a contentious daylong hearing, the court-appointed restructuring officer and a lender both testified that potential bidders have said securing financing would be difficult by the scheduled Aug. 4 auction.
Attorneys for the Rangers argued interested parties have had plenty of time to get financing in order and review documents, because some participated in bidding last year. The judge said the winning bidder has up to two months after the auction to finalize the funding.
Salvatore Galatioto, president of Galatioto Sports Partners that is one of the team's creditors, said obtaining large loans takes time because banks are less eager to loan money and face stiff regulatory oversight.
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He said some interested buyers are hesitant to bid on the Rangers because Major League Baseball continues to endorse a group led by Hall of Fame pitcher and Rangers president Nolan Ryan and sports attorney Chuck Greenberg, whose bid to buy the team has been stalled by creditors for months.
"I don't believe it's become a completely open process even now," Galatioto told U.S. Bankruptcy Judge D. Michael Lynn.
The hearing was to continue Thursday with more witnesses, including Rangers manager Ron Washington. Lynn said he wanted an attorney for team owner Tom Hicks to testify but would consider the Rangers' opposition to it.
Lynn said until he decides whether the auction will be held Aug. 4, potential bidders should continue preparing for it on that day.
"Bidders should assume that this is their opportunity to acquire the Rangers," Lynn said.
The Greenberg-Ryan group, which has bid about $575 million, opposes a delay because its financing guarantee is set to expire Aug. 12.
Selling the team to Greenberg-Ryan's group and repaying creditors $75 million was the Rangers' plan when it filed for bankruptcy in May. The team said it hoped to move forward with the long-delayed sale, but instead has faced one hurdle after another - creditors who say the Greenberg-Ryan bid wasn't the highest, a court-appointed restructuring officer who suggested an auction, and squabbles over everything from turning over documents to the bidding procedures.
William K. Snyder, appointed to make sure the team was maximizing its assets, said keeping the team in bankruptcy a few more months wouldn't "be the end of the world." He said delaying the auction would help ensure a fair process resulting in the highest bid, but he acknowledged that he has not evaluated the team's assets to determine the best sale price.
Snyder and Galatioto both said they have talked to four potential buyers: Houston businessman Jim Crane and Dallas investor Jeff Beck, both cleared by MLB to submit bids, and two unidentified parties.
Galatioto denied that his group had agreed to provide financing for Crane but said they had preliminary talks.
Snyder said one of the new potential bidders was so wealthy that he could fund the deal without financing, and that his interest has been "pretty public."
The judge told those testifying not to reveal any names or bid amounts after creditors objected when Glenn Kurtz, an attorney for Greenberg-Ryan's group, asked if Dallas Mavericks owner and billionaire Mark Cuban is an interested bidder. Kurtz also said he saw Cuban's name in documents produced during discovery in the case.
Last week, Cuban told some news outlets that he was interested in buying the American League West-leading Rangers by joining Greenberg-Ryan's group or another group as a major investor.
"The economics have changed, which has gotten me interested," Cuban told the Fort Worth Star-Telegram in an e-mail. "My lawyers are still going through everything, but the bigger point is that I now have an interest."
Cuban has not responded to requests for comment from The Associated Press. Last year, he was unsuccessful in his bid to buy the Chicago Cubs.