Vince McMahon will not repurchase the XFL according to a reply to an objection from unsecured creditors in the Chapter 11 Bankruptcy case.
There was speculation about McMahon’s intentions when the proposed timeline to hold an auction of Alpha Entertainment, LLC (the ‘XFL’ company that runs the now defunct league) was determined to be too short by unsecured creditors. Also, McMahon backed a deal which would refund season ticket holders prior to those unsecured vendors that would likely not be made whole. Then, there was an article in The Athletic which indicated that the defunct league had been in contact with certain venues inquiring about maintaining the lease agreements they had in place.
Last week, McMahon filed his retort to the committee of unsecured creditors that believed that where the was smoke, there was fire. And, as written by the committee, “act as a shill for McMahon.” “Filled to the brim with inflammatory rhetoric and unsubstantiated accusations that the Debtor [i.e., Alpha] rigged the Bidding Procedures in favor of Vince McMahon, the Committee’s Objection is irresponsible and value-destructive,” wrote the attorneys representing the bankrupt league.
In taking offense to the inference by the unsecured creditor’s committee, Alpha Entertainment, LLC’s attorney went after them: “The Committee’s knee-jerk obstructionism was, and is, reckless and value-destructive. Indeed, if anything, the Committee’s vendetta against McMahon risks creating confusion in the market and possibly depressing the value of the Debtor’s assets by falsely signaling that McMahon is uninteresting in owning the XFL.”
The league argues that setting a sale “beyond the first week of August” will hurt the possibility of a sale and an ability to restart the league in 2021. The XFL argues that it has some potential bidders to the assets of the company and the possibility that there could be a restart of the league by another owner.
The XFL also addressed the attempt to refund ticketholders.
In deposition testimony, McMahon gave his reasoning for a sale sooner than later.
The XFL contends that delaying the debtor sale process would likely decrease the number of potential bidders as they “would be forced to price in the increased risk that the XFL would not be able to generate any revenue until 2022.
Payout Perspective:
Perhaps the Committee forced McMahon’s hand to admit that he would not purse the purchase of assets from the XFL. Yet, there was a potential strategy for McMahon to get back the league without the need to repay some of the debt incurred this year. According to the filings, there are potential buyers out there that are willing to purchase the league and keep it afloat. Whether they will is something that we may see once the Bankruptcy Court determines the sale.
Leave a Reply