Bankruptcy abuse?

[pwcmba]

Clear the liabilities for an easier sale I guess.

http://www.chicagotribune.com/busine...,5186979.story

Cubs may file bankruptcy
By Bruce Japsen | Tribune reporter
9:36 AM CDT, July 13, 2009
The Chicago Cubs may consider a bankruptcy filing as part of closing the sale of the team, according to sources close to the major league ball club.

The National League ballclub would be the first team in nearly four decades to do so. The move, first reported by Bloomberg News, comes as Cubs parent Tribune Co. works to sell the team.

The prepackaged bankruptcy under discussions by Cubs officials would be designed to clear the team of liabilities and make its sale easier, sources close to the team said. Any prepackaged filing by the Cubs could allow the team to re-emerge from bankruptcy in a very short time from weeks to a day or so, these sources said.

This month, Tribune Co. made progess on a deal to sell the Chicago Cubs, Wrigley Field and other assets to the family of TD Ameritrade founder Joe Ricketts for about $900 million. The company continues to discuss a deal for the same assets with a group led by New York investor and former Chicagoan Marc Utay.


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The status of each potential purchaser and their ability to buy the team should not be affected by the filing, sources said.

Tribune Co. is in the midst of a reorganization under a Chapter 11 bankruptcy filing as the media concern struggles under a heavy debt load, poor economy and loss in revenue at its newspapers and television stations.

Reached this morning Tribune Co. spokesman Gary Weitman "declined comment on the specifics of any potential transaction."

bjapsen@tribune.com

[flintlock]

Re: Bankruptcy abuse?

I don't think bankruptcy laws were originally meant to help multi-millionaires sell their hobbies, do you?

[c1ue]

Re: Bankruptcy abuse?

The point of bankrupcty is to separate out debt vs. assets and facilitate an acceptable situation given the 2 circumstances for the creditor.

If the creditor in this case is itself going through bankruptcy and is willing to eat the losses, then I don't see why it is an abuse per se. The creditors to the creditor in this case are the ones who need to raise a stink.

Of course the assumption here is that the creditor is the parent organization.

Hopefully this is what is happening vs. a GM or Chrysler style creditor screwing.