NEWSLETTER
There’s been a lot of erroneous information flying around in the last few days about the Cubs sale taking place outside the purview of the bankruptcy court that is handling the Tribune Company’s bankruptcy. The claim is that because the Chicago Cubs franchise was not an express component of of the Trib’s Chapter 11 filing, the sale will not have to be reviewed by the court.
Well, as I’ve said, I don’t think that’s correct, and here’s some stuff that makes me look smart:
Although the Chicago Cubs aren’t part of Tribune Co.’s Chapter 11 bankruptcy filing, experts say a federal court overseeing the case is likely to review the baseball team’s impending sale anyhow.
It’s not yet clear whether such a review would be a mere formality, or whether it could derail or delay a sale. Bankruptcy lawyers said Friday it ultimately could rest on whether creditors and the court believe Tribune could have gotten more than $900 million — what the billionaire Ricketts family has agreed to pay for the Cubs and related properties. The Associated Press.
Now, I am NOT a bankruptcy expert, but it always struck me that when a bankrupt corporation seeks to sell almost $1 billion worth of assets, the bankruptcy court is going to need to review the transaction to make sure it doesn’t hurt any of the creditors. Looks like I was right.
A few more thoughts after the jump.
One item certain to come up in the review is whether there were higher bids for the Cubs.
Although Marc Utay’s bid was reportedly higher, it was only marginally so. And the Ricketts family’s bid involved a great deal more cash – something of great value these days. Presumably, the Tribune Company’s various creditors would rather see cash coming into the bankrupt estate than debt obligations – and the court is likely to see it the same way.
So, although I am not terribly worried about the review, it does add another layer of approval to the process. For the team’s offseason purposes, even if it does not add difficulty in getting the Ricketts’ approved as the new owners, it does add time. How much time remains to be seen, but the Opening Day transition of power looks more and more optimistic at best.
