The nearly six-month conflict involving creditors of Hicks Sports Group (HSG), who claim the company's proposed sale of the Rangers is undervalued, has been characterized as being between the lenders and HSG. But it was HSG's own counsel that told MLB that prospective owner Chuck Greenberg's offer was inferior to one from Houston businessman Jim Crane. "It is unlikely we can recommend that we proceed forward with Greenberg based on where we are with their proposal and assuming we can proceed forward with Crane," Glenn West, a partner with HSG counsel Weil Gotshal, wrote on Jan. 16 to Latham Watkins, the creditors' counsel. "Crane thus is at least $13 million and perhaps more than $20 million ahead of Greenberg with a lot more certainty of closing, assuming of course he can get MLB approval." That day, MLB under its rights in its agreement with the Rangers, reached since the team had defaulted on its debt in March '09, took over the sale process and executed the Greenberg agreement. MLB Senior VP & General Counsel Tom Ostertag in an e-mail to West on Dec. 29, 2009, which was included in the bankruptcy court filings, said because Greenberg had been preliminarily chosen by HSG on Dec. 15, HSG could not entertain other offers. "We believe the intent of [our agreement with the Rangers] is clear that negotiation toward a definitive purchase agreement is to be with the winning bidder only," Ostertag wrote. "None of the losing bidders should be part of any negotiation at this point." After receiving Ostertag's reply, West wrote the creditors on New Year's Eve '09, "Basically, the response from the MLB was to prohibit us from negotiating with anyone other than Greenberg. Their intent seems to be to lock us into Greenberg even though Crane now has a clearly superior economic deal -- and may always have had based on Greenberg's current position. We need help here. Unless the lenders weigh in, we are going to be stuck negotiating a deal that is clearly worse than Crane's."
So, basically...Hicks Sports Group entered into an exclusive agreement with Chuck Greenberg's group to sell the team to Greenberg's group in December.
As negotiations stalled, Crane re-entered the picture, seemingly in violation of the exclusivity provision in the sales agreement, and HSG's counsel then contacted the lenders to recruit them to "weigh in" so that HSG would not "be stuck negotiating" with Greenberg.
Then MLB took over the Rangers and the sales process, cutting HSG out of the loop.
There are more details that need to come out, of course...
But this reads to me like the lenders are playing hardball because HSG (which, ultimately, is Tom Hicks) encouraged the lenders to play hardball to squelch the sale to the Greenberg group.
Thank you, once again, Tom Hicks.