The Unsecured Creditors’ Committee has agreed to allow the pending sale of the XFL to the group led by The Rock, Dwayne Johnson and Dany Garcia. Alpha Entertainment had filed a response to the objection lodged by the committee but it appears from Court filings that objection has been withdrawn.
Alpha Entertainment filed a pair of declarations from the company that owns the XFL defended the sale purchase to The Rock. One of the declarations revealed that The Rock’s group would be paying up to an additional $9.2M.
A declaration from Jeffrey Pollack and Jay Weinberger defended the sale which was pegged at $15 million. The two declarations claimed that there was ample time to obtain bids which were open from May 28 through July 31. According to the declaration from Weinberger, there were 246 potential bidders and only one qualified bid. Four interested parties submitted “initial indications of interest,” which did not require actual bids. 35 parties signed confidentiality agreements to have access to detailed confidential information on the XFL’s financials. Per the declarations there was only one other bid that submitted an actual bid by the deadline as the other was determined “unqualified”.
Declaration of Jay Weinberger by MMA Payout on Scribd
Declaration of Jeffrey Pollack by MMA Payout on Scribd
Also of note, the parties agreed to allow Oliver Luck’s breach of contract lawsuit against Vince McMahon to go forward in federal court in Connecticut and to add the XFL as a party to the lawsuit. The request, a “relief from stay [of bankruptcy]” grants the lawsuit to proceed despite the XFL being in bankruptcy. Usually, if a party is in bankruptcy, civil lawsuits are stopped until resolution of the bankruptcy case. Moreover, since a party is in bankruptcy, they may be able to get out from under liability in the lawsuit. Here, the order keeps the XFL (potentially) on the hook.
Payout Perspective:
One has to believe that there were assurances made to the committee that there would be compensated for some of their outstanding liabilities to the XFL. While it is not spelled out in the bankruptcy papers, there was only one bid that was willing to pay for the XFL’s assets. We can argue that this was due to the current time of the sale. With the uncertainty of whether fans would be granted access by the time the company reopens, plus the liabilities it has and the looming Luck lawsuit, not many were willing to pay $15 million (plus another $9.2M). Still, this has to be seen as a bargain for The Rock, Garcia and the investors if they are able to revive the league.
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