ARLINGTON, Texas — The Texas Rangers filed for Chapter 11 bankruptcy protection on Monday in hopes of getting its $575 million sale to a team of investors cleared by midsummer.
The 21-page filing in U.S. Bankruptcy Court in Fort Worth, included a list of unsecured creditors headed by Alex Rodriguez, who’s owed $24.9 million in deferred compensation six years since he was traded away from the team.
Other players on the list include Kevin Millwood ($12.9 million), Michael Young ($3.9 million) and Vicente Padilla ($1.7 million).
The team called the filing a “voluntary” plan that will fully pay the club’s debt tied up in Tom Hicks’ financially strapped ownership group. Hicks has agreed to sell the team and other assets to an ownership group led by Pittsburgh attorney Chuck Greenberg and team president Nolan Ryan, the Hall of Fame former pitcher.
The team said the sale proceeds will be enough to satisfy all the Hicks Sports Group debt guaranteed by the Rangers.
Commissioner Bud Selig said the proposed deal “serves the best interests of the team, its fans, MLB and all other parties involved.” He said he would recommend that other major league clubs approve the deal.
“This agreement assures an orderly process to expeditiously transfer Rangers ownership the Greenberg-Ryan group, and it protects the franchise’s baseball operations,” Selig said.
Former Rangers Mickey Tettleton ($1.4 million) and Mark McLemore ($970,000) — neither of whom have played for the club since the 1990s — round out the top six creditors. Others among the top 30 listed in the filing are Tickets.com, Rawling Sporting Goods Co., Clear Channel Outdoor and Stats Inc.
The filing is not the first in baseball.
The Chicago Cubs briefly filed for Chapter 11 protection last year in a step that allowed its new owners to avoid potential claims from Tribune Co. creditors. The Baltimore Orioles were sold in a bankruptcy auction in 1993 after owner Eli Jacobs filed for Chapter 11; the same step happened to the Seattle Pilots after the 1969 season, before the new owners moved the team to Milwaukee and changed the name to the Brewers.
Greenberg initially hoped to have control of the Rangers by opening day, but concerns from Hicks’ lenders have slowed the deal. The Hicks Sports Group defaulted on $525 million in loans last year. Greenberg said Hicks’ agreement to sell 153 acres around the stadium facilitated the agreement.
Hicks, who will be chairman emeritus of the Rangers under the proposed deal, said he was “proud to play an active role in resolving the deadlock in this complex sale process.”
Major League Baseball has agreed to give the Rangers a new credit facility while it waits for the deal to be completed, the team said.
Texas is in first place in the American League West, and the team was at pains to say the sale and the bankruptcy filing would not hinder efforts to remain a contender.
“Our goal is to move forward with our plan to create a long-term record of success and championships,” Ryan said.
This is the 50th season of the franchise that began as the Washington Senators in 1961, and moved to Texas in 1972. The Rangers have never won a playoff series, going 1-9 in the postseason — all against the New York Yankees — after winning their only three AL West titles in a four-year span at the end of the 1990s.
The Rangers finished second in the division last year with only their second winning record in 10 seasons.
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