|Cubs' Bankruptcy Filing Could Be
Accompanied By Motion To Sell
A Cubs' Chapter 11 bankruptcy filing "could be the last piece ... to fall in place" for the Ricketts family's acquisition of the team, Wrigley Field and 25% of CSN Chicago from Tribune Co., according to Roeder & Spielman of the CHICAGO SUN-TIMES. The bankruptcy filing
"could be accompanied by a motion to sell" to the Ricketts family, and bankruptcy experts said that it is "common for a financially troubled company to sell a healthy subsidiary in a way that shields the buyer from debts." A source close to the talks said the tactic for the Cubs "would deliver as clear a title as possible to the new owner of the team," and it is a "way in some respects of inoculating the team." CSN Chicago's Steve Stone said that bankruptcy "would provide protection" for the Ricketts family. Stone: "The sale of the Cubs will be done sooner rather than later. It's pretty well a done deal." Stone said that "all sides want to complete a sale before the season is over, so a new owner will have time to make financial decisions about players and Wrigley Field improvements for next year." Sources said that the Ricketts' deal with Tribune Co. "will be complete soon," though Roeder & Spielman note the deal first "must be approved by Tribune's bankruptcy judge" and 75% of MLB owners (CHICAGO SUN-TIMES, 7/14
). CSN Chicago's David Kaplan said, "It's like driving the franchise through a car wash. Everything gets cleaned and nobody can come back to Ricketts and sue him based on the Tribune's bankruptcy" ("Chicago Tribune Live," CSN Chicago, 7/13
). In Chicago, Ameet Sachdev cites sources as saying that a Cubs bankruptcy filing "would be made as a legal tactic designed to expedite the sale of the team and not because of any financial pressures on the franchise." Still, Sachdev notes such a move would "add another layer of complexity to the deal, and even the word 'bankruptcy' carries a negative perception." MLB President & COO Bob DuPuy said the league has had "no conversation to date with Tribune Company about the bankruptcy process surrounding approval of a purchase" (CHICAGO TRIBUNE, 7/14
NO IMPACT ON PLAYERS: In Illinois, Ted Cox notes the Cubs yesterday "took immediate pains to insist bankruptcy would not nullify any player contracts or otherwise alter any of the team's financial dealings, while not denying the move was under consideration" by Tribune Co. and Chair Sam Zell. In theory, the Cubs "would simply go into bankruptcy court, register their creditors, then go about business as usual." Univ. of Illinois College of Law professor Robert Lawless: "This is more of a legal maneuver than something actually going on with the Cubs. ... If you're solvent, the creditors should be paid 100[%]." New York Univ. Tisch School of Sports Management professor and former MLB Rangers President Michael Cramer said of the process, "You take it in the front door, and it's just like you're getting radiation. It comes out the other door about a half-minute later. It's clean" (Illinois DAILY HERALD, 7/14).