Cubs May File Bankruptcy To Help Sale, Would Be First MLB Bankruptcy In 39 Years

CHICAGO — The corporate owner of the Chicago Cubs is considering having the baseball team file for bankruptcy protection as a legal step to hasten its long-awaited sale, according to two people with knowledge of the process.

Tribune Co., which itself filed for bankruptcy protection in December, intends for the Cubs' own stay in Chapter 11 to be as short as a day or two. If pursued, the filing would be done to give the team's next owners as "clean" a title to the Cubs as possible _ to protect them from possible future claims by Tribune creditors.

The people familiar with the process described it to The Associated Press on Monday, confirming earlier reports. These people spoke on condition of anonymity because the bankruptcy plans are not yet public.

One person said the filing is not imminent and is not necessary in order for a sale of the Cubs to take place.

A possible bankruptcy filing is just the latest twist in the lengthy sale saga involving a prosperous but star-crossed franchise that hasn't won the World Series since 1908.

Tribune, which bought the Cubs from Wm. Wrigley Jr. Co. for $20.5 million in 1981, put the team on the market on opening day 2007, when real estate mogul Sam Zell agreed to buy the media conglomerate. But Zell has proceeded deliberately in selling off one of the company's most lucrative assets, which were not covered by the Tribune Co. bankruptcy filing in December. The recession and credit crisis have slowed the sale further.

The family of TD Ameritrade founder Joe Ricketts remains the front-runner to buy the team for about $900 million, but there is no final agreement. The family and Tribune Co. are still ironing out details.

Cubs Chairman Crane Kenney did not immediately respond to a request for comment.

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Bankruptcy attorneys said the Cubs should be able to get in and out of bankruptcy court quickly, citing the General Motors Corp. case among others without major underlying disputes.

"They're not looking for protection from creditors who are banging on the door," said Paul Rubin, a corporate bankruptcy attorney in New York who is familiar with sports bankruptcy issues. "They're looking to cleanse the entity so the buyer is protected on the back end."

Peter Russin, a bankruptcy lawyer in Miami, said filing in court now that a deal appears close makes sense because it can help resolve any remaining roadblocks to the sale.

It's not clear what issues might be holding up a final agreement on a sale package that includes the Cubs, Wrigley Field and a 25 percent interest in a regional sports network.

Asked about the possible bankruptcy filing Monday, Major League Baseball Commissioner Bud Selig said he's been "talking to people" but "I can't tell you there's anything new."

"The Tribune Co. is handling it and it's in their hands until they come to us, and they have not come to us," Selig said. "It's a situation that they're handling right now, and until baseball's involved there's nothing more for me to say."

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AP Baseball Writer Ronald Blum contributed to this report.

Comments

[larry278]

Will the Cubs go bankrupt before the feds declare Ca or someother state de jure bankrupt, in an involuntary bankruptcy? How many hours after the Cubs are declared de jure bankrupt till Japanese investors buy the Cubs franchise? When 3 other NL clubs will move to Japan to keep the Cubs company; how many days or months will it take to set up deals with 3 other NL clubs?
Now on to the Sox, will Cleveland or Detroit beat the Sox in moving to Japan? Will the Sox be among the 3 other AL teams to move to Japan to keep company with the 1st AL team to move to Japan?
It's a given that the lords of MLB will approve all of these deals within 1 hour after each deal is signed. It's about money for the lords of MLB. There is a great deal of money for baseball in Japan & eastern Asia near Japan, i.e. within 4 hours flying time from Japan.
Fear not Chicago, MLB will give Chicago a Tripple A club yet to be named to replace the Sox & the Cubs.

[jalowe1957]

When you have those in Congress talk about the ballooning national debt as it could be repaid, why are they talking about the Chicago Cubs filing for bankruptcy as something casual, as if it's a non-issue?

[jsgaetano]

> "to protect them from possible future claims by Tribune creditors"

Sounds like even the Tribune company doesn't believe the Tribune Company is going to turn around.

The funny thing is, they are selling the single most valuable asset they possess (the baseball team)... and keeping, as the core of the business, the single most worthless asset (the newspaper). From a business standpoint, they should have dumped the newspaper and just been happy that everything else was turning a nice profit.

[Bude]

A judge doesn't have to allow this. Sam Zell's purchase of the Tribune was a colossal economic blunder. He is though, a master at creative financing, but so was Jeff Skilling. Everything about the Cubs is a joke. How about fixing the ballpark, and stop the cement from falling on the fan's head. Maybe Zell will push for condemnation.

Well, there's always "next year!"

[Rosy]

This is just plain wrong.

[Bude]

The Cubs follow the lead of their morally bankrupt owner. How does one of the most profitable franchises in all of sports qualify for bankruptcy? Sam Zell! The Cubbies continue to set the standard for mickey mouse. Wait till next year!

[KCFreedom]

Forcing a profitable entity into bankruptcy just to complete an acquisition deal doesn't seem legal, but alas, the laws have all been changed to favor corporations. It seems that Zell has run the once-proud Fibune into the ground and the Cubs arn't far behind.

Are the Cubs fans staying silent on this matter? It would seem this situation would be quite an embarrassment for them. Re-naming Wrigley will be sacrilege. Why destroy the best flavor of a brand?

[local21]

Trade the Cubs, Pontiac and Saab to the Chinese for Zhejiang Shengqi Motion Apparatus Co., Ltd.

[ejhickey]

Let me see if I understand this. Zell buys the Tribune and avoids using much of his own money by using the Trib employees ESOP plan as collateral Now the Trib is in Bankruptcy and the ESOP has lost much of its value and its claims will be wiped out in BK. Zell wants to sell the Cubs for close to a billion but needs to avoid a big tax loss. So he dials up a Quick rinse bankruptcy to wash away any problems or messy creditors. This stinks as bad as the Cubs play. I hope the BK court goes after Zells personal assets

[planetjeffy]

I am not a Cubby fan, but what Zell did to the the Trib and it's union is downright criminal. He literally stole retirement money out of old and crippled people mouths. Shame on Zell for doing this. Shame on the Trib for caving in. Shame on the US for not having laws against legalized robbery. Shame on MLB for approving the transfer. This represents everything that is wrong with America and humankind.

[jsgaetano]

Zell was just being a conservative, and doing what conservatives do.