At the press conference yesterday, Texas Rangers owner Tom Hicks emphasized that his “pre-packaged” bankruptcy filing would be done quickly, before the July 31 trade deadline and before the August deadline to sign draft picks. That would allow the new ownership the ability to spend more money if needed.
Pre-packaged bankruptcies are done if the creditors are on board. Traditional bankruptcies have to get approval of the creditors after the bankruptcy court makes its findings. Pre-packaged can be hashed out in about six weeks. Traditional ones can last more than a year.
According to Bloomberg News, a U.S. Trustee from the Justice Deaprtment filed a brief today in U.S. Bankruptcy court in Fort Worth stating that the Rangers’ bankruptcy should be treated as “traditional.” Read below from the article:
The claims of some unsecured creditors “are disputed, payment will be deferred until adjudication, and interest is barred under the proposed plan,” U.S. Trustee William T. Neary said today in a brief filed in U.S. Bankruptcy Court in Fort Worth, Texas. “Fairness and procedural due process support assuming impairment, requiring disclosures, and treating this case as a traditional bankruptcy filing.”
This is not from a lawyer representing the creditors. This is from the U.S. Justice Department. Read the whole Bloomberg story here.