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I would think Selig would force the new owners to pay all deferred compensation so that they avoid this issue. If they let it go, MLBPA might decide that in order to protect their constituents, they need to make sure all teams are stable, and force them to open the books.
It's 25 million dollars. I don't care how rich you are, that's a shitload of money. He deferred it to try to help the team. #### Hicks and #### Seligula.
The books are already open to the players.
It's 25 million dollars. I don't care how rich you are, that's a shitload of money.
What if you got 50 billion? Is is a shitload then?
This is one of the only things that could possibly cause me to support a player strike at this point. No matter what, the players should get what they were signed for, even if it comes out of the rest of the teams' pockets.
If nothing else, it'll keep people from doing stupid things like giving A-Rod contracts that make Albert Pujols feel like $20M/year isn't ####### enough.
<i>Rodriguez's concerns will not be an issue if the team is sold to a group led by Hall of Fame pitcher Nolan Ryan and sports attorney Chuck Greenberg, who are Major League Baseball's preferred buyers. Their $575 million bid includes paying the full $204 million owed to A-Rod and other unsecured creditors.
But under the bidding procedures set for Wednesday's auction, other potential buyers can decide which provisions to include in their offers.<i>
I'm not shedding any tears for A-Rod (in part because I think he will get paid in full here), but looking at this relative to how much money he has misses the point. $25 million is his compensation for a year's worth of work being the best in the world at what he does, something for which he likely worked very hard. If someone told me that I might no longer be getting paid for a year I spent working my ass off and being awesome at my job, I would probably try to do something about it too.
No - once an entity enters bankruptcy proceedings, there is an automatic stay, which essentially is an injunction against any actions by creditors to collect debt, subject to limited exceptions (no A-Rod exception). The point of bankruptcy is to avoid a race to the debtor's assets, which could have the effect of destroying value.
Any time you can throw "smarmy" into a post is a good one.
EDIT: Potato-flavored coke to Mr. Potato Head.
Yes. Any amount I can't comprehend is a shitload. And to my knowledge, Warren Buffett hasn't made Alex his special friend, so he doesn't have $50 billion.
I realize you spent $25 million to stiffen Strasburg's shoulder, but I'd say that was a waste, despite your vast riches. As a pitcher, he was likely to have problems eventually, and then you could have gloated about his premature promotion to the majors without losing your ashtray money.
If you're so poor CUT BACK ON EXPENSES.
typical.
Welfare Queens and their Cliff Lees.
As a point of fact what ARod does best is sign contracts for vast amounts of money; I don't know enough about other sports to say if he's the best in the world at it.
Agree he should get paid.
If their smarmy baseball stars what?
I don't know how accurate that picture of bankruptcy is, but it is a common picture. If Tom Hicks is bankrupt and can't pay his debts, fine. But he should be living in a $200 apartment and taking public transit while this all plays out.
They could make all player contracts debt secured against the team itself so that if the holding company that owns the team goes belly up that all the players get paid before the creditors to the holding company.
(Of course that might make financing more difficult and lower the sale price of teams and thus be vehemently opposed by the owners)
But the point here is that it might not be necessary, but is a by-product of Selig & Co.'s manipulations to drive away and/or reject potential bidders who might NOT default on those debts, but who might not be in the good graces of the cartel. And any bankruptcy judge who would allow the owners, through Selig, to get away with that nonsense needs to be slapped silly. Protection of the rights of the creditors (yes, even smarmy baseball players) is supposed to part of their job.
Seriously, I don't see how Arod will not get 100% recovery on his claim.
Did Hicks file for personal bankruptcy? Or did his corporation?
There should be at least some reasonable claw back of any profits, fees, etc. extracted from the business. Say 5 years prior to bankruptcy? Hicks & Co. should really not be allowed to keep any profits they earned off the Rangers while stiffing the creditors.
These private equity clowns rape the businesses they own for "sonsulating fees", "management fees", etc., and then stick the debtholders with the rotting corpse.
Allowing ownership of a leveraged asset with little or no cash equity is an invitation to bad behavior.
I don't think Hicks has any money or emotion vested in John Lackey.
These private equity clowns rape the businesses they own for "sonsulating fees", "management fees", etc., and then stick the debtholders with the rotting corpse.
If you don't want the owners of the business to distribute dividends or make related-party payments, that should be (and typically is) negotiated as part of your debt covenants. If you take money out of the Company prior to filing for bankruptcy, you can be subject to fraudulent conveyance claims. But if it was legal, permitted by the covenants, and long before bankruptcy, at a time when the business was doing fine, then I don't think those typically are (or should be) clawed back.
Nobody held a gun to the creditors' heads and demanded that they extend loans.
Loans contain a risk component. If you don't want to assume the risk, then don't lend the money. It's not like bankruptcy is a new legal concept.
Loans contain a risk component. If you don't want to assume the risk, then don't lend the money. It's not like bankruptcy is a new legal concept.
But private equity type ownership is a new concept. The trivial equity, highly leveraged, portfolio ownership concept is rather new. Owners used to care if their companies went belly up, now, they only care that 80% don't.
Debt covenants haven't caught up.
As for Rodriguez, there's a lesson in there about deferred compensation. Ask anyone who has had their pension plan raided by creditors when their employers go bankrupt. (Your 401(k) is safe, but there's plenty that isn't safe. This is something to look into for those with a deferred compensation/pension/retirement plan that goes beyond a 401(k).) Rodriguez is almost certain to lose out on most of this cash. He's near the back of the line unless the contract language securitized the deferred compensation.
The more interesting aspect which many have brought up, is what the implications are on the ability of MLB to choose the next owner of the Rangers. My suspicion is that financial wherewithal is a much, much higher criterion for Selig's bunch and that the bankruptcy court and MLB ownership's interests are far more aligned than people are crediting (ha ha).
No way, no how. The MLBPA will blow up the owners if this happens. He'll get his money.
Who are the next few big names to face free Agency? Lee this year. Then I think Fielder and Gonzalez in 2012 (not looking to closely).
What are the odds they get a security interest in something like the YES Network, Busch Stadium, or the Chicago Bulls?
Yup. In the event of a true catastrophe, in which it really could be shown that (1) the other owners were having to bail out an ailing franchise at substantial losses to themselves, and (2) a new owner was coming in and creditors across the board were getting hurt, and (3) there had been no manipulation by the owners to freeze out an alternative owner with deeper pockets just because Bud Selig doesn't like his look . . . . well, then and only then could I imagine the union accepting a haircut on deferred compensation.
You know when this might happen? When the moon is in the seventh house, and Jupiter aligns with Sarah Palin, and the DH will rule the planets, and Courtney Love will steer the stars.
In general, a defined benefit or cash balance pension plan is also safe to a significant extent. The Pension Benefit Guarantee Corporation will cover most benefits owed that the company's trust can't pay for. If you're not vested (less than 5 years worked) or if the plan offered major improvements over the last 3 year period, that may be at risk, but the rest is safe.
Now, if you're lucky enough to have non-qualified pension arragement or to be involved in another deferred compensation plan for tax purposes, that money generally is not safe. But then again, the only reason why you'd have that is because you're earning a lot of money as it is with the company, and should have a good understanding of the risk involved.
Do you just make this #### up as you go along? Private equity has been around since before J.P. Morgan, over-leverage investment partnerships have been all the rage since the beginning of time, just like the craps table and roulette. 50 years ago a bright journalist left Fortune Magazine to put into place an investment partnership where he would also short stocks as well as buy them, he coined the phrase "Hedge Fund" to describe it, but it wasn't even new then. Now the "new term" is used indiscriminately to describe what has been around forever, investment partnerships that allow people to pool and manage money together. And they've always used leverage. Ben Graham's investment partnership was started in the 20s, and got into trouble being over-leveredged during the 1929 crash.
Since JP Morgan is no longer here to lecture you, allow me. No one wants your stupid ideas for "fixing" the situation. Both sides prefer it the way it is rather than damaged by one of your loony concepts. Mandatory 5 year clawbacks would eliminate much borrowing, many owners would fear that prior earnings will be taken away from them unjustly just because of unforseen events forcing a bankruptcy. Bankruptcy already has very specific rules to catch blatant cases of this. JP Morgan would tell you that it's on the banker's shoulders to know the men they do business with, and to understand the contracts they sign and the incentives they create. No law or government regulator will ever know your business and it's risks the way you do, so don't invite them in to #### it up for everyone.
Amen.
Every time there is a call for more regulators, it is always for an idealized entity that does not exist. That cannot exist.
The only real protection is caveat emptor
I mostly agree, but you need at least some mechanism for fraud prevention as well. (Current bankruptcy law has this.)
The reality is that if you lend money to anyone that has multiple creditors, it has always been your responsibility to make sure that you properly balance the risk and ensure your position among the other creditors. The government stops the borrower from doing wacky things like selling all of the company assets to a friend for $1 to shaft the creditors, but outside of that, interference will simply add overhead that makes it harder for willing lenders and borrowers to reach agreement.
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