May 26, 2010
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News: Texas Rangers Ask Courts To Pay CC Debt
As the Texas Rangers continue to pursue relief from the courts with its recent filing of Chapter 11 bankruptcy protection, the team’s owners work on cleaning up the clubs credit card debt. The team has more than $400,000 in credit card debt which could threaten the hopeful sale of $575 million. Owners of the Major League Baseball team asked for permission by bankruptcy court Judge D. Michael Lynn in a U.S. Bankruptcy Court in Fort Worth, Texas to pay down the debt so the team would be able to continue its tour. The team is currently on an eight day run against the Kansas City Royals, Minnesota Twins, and the Chicago White Sox. Owners of the team fear that if the debt isn’t paid down, it could cause the credit card from being denied when presented for traveling expenses.
The team’s attorney, Ronit Berkovich with Weil, Gotshal & Mages LLP asked the judge for an exception in paying the credit card balance since the card was not issued under the name of the team but rather its owner Hicks Sports Group which is owned by sports magnate, Tom Hicks. Under the terms of bankruptcy filings, the court becomes the guardian of the petitioner’s assets. Judge Lynn was quite taken back by the amount owed on the team’s credit card saying they apparently have expensive taste in hotels and dining. The opposing attorney protested the request saying that the decision to allow the card payment should be carefully considered since it would actually be considered a loan.
Berkovich said the request required a quick resolution because the team was on the road and they didn’t want to risk credit card transactions covering travel expenses being declined. Judge Lynn eventually granted the request but not without first commenting on the comedy of it all by saying it was like a story out of the movies.