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The bankruptcy case involving the Texas Rangers has drawn considerable interest among the crowd that buys, sells and finances baseball teams and those who conduct other activities around teams.
The commissioner of baseball has approved a sale of the team to a group led by Pittsburgh sports attorney Charles Greenberg and Hall of Fame pitcher Nolan Ryan. The problem is that the numerous creditors of the team are not convinced that this is the best deal that owner Tom Hicks can make. At one point, the commissioner sent a letter that reminded the creditors that their lending agreements required the creditors to honor any action the commissioner might take in the best interests of baseball. Some interpreted this letter as an implied threat that he might step into the deal and adjust the terms of the loans for the best interests of baseball.
Although this phrase, “the best interests of baseball,” carries with it broad authority for the commissioner, the creditors strongly objected and commented that such a decision would jeopardize available credit for Major League Baseball.
What lending institution would advance credit when the commissioner might substantially revise the deal?
Now that the issue is pending in Bankruptcy Court, the normal legal process will decide what to do about the sale of the team and the numerous interests of the creditors. The bankruptcy judge has the authority to order a new bidding process, to stay with the current buyer group or to grant other relief.
To the creditors, this situation is likely far preferable to the broad authority of the commissioner. Creditors may see two potential errors of judgment by the commissioner: First, the approval of the sale of the team to this buyer group, as opposed to other potential buyers that may be offering a better financial package for the creditors, and, second, the threat of using the best interests of baseball clout to revisit the deal itself.
The court has issued a ruling that gives guidance to next steps for sale of the Rangers, but not in the form of the agreement that the parties presented to court, known as the prepackaged plan. The creditors have successfully argued that the court should reject that plan.
The creditors and the buyer group remain in mediation trying to negotiate a solution. We will keep track of the bankruptcy case for further interesting developments.
—June 30, 2010
The new immigration law in Arizona has generated plenty of controversy, even though—except for more aggressive enforcement—it does not change what already exists in federal law. It should be a reminder, though, that team owners in any state are obligated to verify employment eligibility of all employees, whether players or otherwise.
Generally, Major League and Minor League Baseball do a very careful job following the immigration process for foreign players. After all, the teams are paying millions of dollars for them. And keep in mind that baseball is employing not only Latinos but also Asians and players of other ethnic origins. Baseball also has many established programs for these players in their cultural transitions.
Remember that baseball teams at all levels must comply with immigration laws for all employees, not just the players. Until recently, immigration seemed to be a back-burner issue, so employers might have grown lax in requiring documentation from employees and completing Form I-9. It would be a good idea to ensure the paperwork is in order for all employees, including U.S.-born citizens. Information about employment eligibility verification can be found at the U.S. Citizenship and Immigration Services website, which includes information about electronic verification.
—May 8, 2010 |
