Originally Posted by
Mr KLC
For all the noise surrounding the XFL’s bankruptcy, and the glamour announcement today of a buyer trio including entertainer Dwayne “The Rock” Johnson, perhaps the most startling aspect was this line in a bankruptcy court filing today: “no other Qualified Bids were received by the Bid Deadline.”
In fact, only two came in at Friday’s deadline, and only Johnson’s passed muster. And that announced offer is now subject to an objection by the unsecured creditors’ committee, which is alleging the deal shields XFL insiders and other beneficiaries from giving back money the league paid them.
After pumping roughly $200 million into the XFL, and assurances from his investment bank in May that there were dozens of interested suitors, Vince McMahon, the CEO of XFL’s parent company Alpha Entertainment, has this to show for his effort: a $15 million offer from a group comprised of Johnson, his ex-wife and business manager Dany Garcia and their partner Redbird Capital. An auction scheduled for today was canceled in light of the news there was only one suitor.
More serious than the gripes of former officials is a 14-page objection to the deal filed late today by the unsecured creditors’ committee.
“Accordingly, while the Committee generally supports a sale to the Buyer … the terms of the transaction as currently proposed are objectionable, as they are not in the best interests of the estate, would surrender critical sources of recovery for unsecured creditors and are generally inconsistent with market standards,” the committee wrote.
The committee’s objection is mainly that potential legal claims, like the right to claw back payments made in the year before bankruptcy, are part of the sale agreement. According to the committee, this “reflects over $60 million of potentially avoidable and recoverable transfers made by the Debtor during the 90-day and 1-year periods preceding the bankruptcy filing.”
A hearing on the proposed sale is scheduled on Friday in Delaware federal bankruptcy court.
Also unresolved, Pollack said, are TV deals with Fox and ESPN, which Alpha Entertainment wants to pass along to the next league owner.