Alpha Acquico, the company, owned by The Rock, Dany Garcia, and RedBird Capital Partners, who is trying to purchase the XFL, has hit a potential roadblock. Alpha Entertainment’s Committee of Unsecured Creditors has filed a motion to stop the sale of the XFL.
The XFL is set to be purchased by Alpha Acquico for $15 million on Friday. However, the Creditors are not too happy with the purchase price. In a 13-page motion filed in court today, they are trying to pause the sale because the Buyer has….
“an ongoing obligation to negotiate terms with the Proposed Buyer that are most favorable to the estate and do not unduly prejudice its creditors.”
The good news is the creditors are onboard with the sale in general.
“while the Committee generally supports a sale to the Buyer—on terms modified to account for the value associated with the Purchased Claims or to remove the Purchased Claims from the Purchased Assets and that addresses its other comments to the APA—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.”
Their issue is the timing of everything.
“On July 30, 2020, just before the Bid Deadline, Alpha Acquico, LLC (“Proposed Buyer”), submitted its bid along with an Asset Purchase Agreement (the “APA”) reflecting a $15 million purchase price and a definition of Purchased Assets that includes Purchased Claims, which includes, among other claims, all Causes of Action of the Debtor. While the Debtor has generally consulted with the Committee throughout the sale process, the Committee only first become aware of the Proposed Buyer’s intent to acquire the Purchased Claims on the evening of July 30, 2020.
On August 3, 2020, the Debtor filed a Notice with the court canceling the Auction and identifying the Proposed Buyer as the Successful Bidder. “
All hope is not lost, the Committee believes their issues can be rectified.
“While the Committee believes that the Sale deficiencies can be rectified, the sale as currently proposed fails to satisfy the sound business purpose standard. “
The bottom line is the creditors are worried the XFL’s assets are being sold at a low price. Going through a speedy sale of the league is cutting down on how much they could potentially get from a new buyer. The creditors are trying to re-worked the terms a bit.
We will see if this slows anything down, or this can get done by Friday’s sale hearing. Based on the publics’ reaction, everyone is on board with the sale.
According to the court files, the Rock’s group was the only one purchasing the league, so be happy you can get anything at this point, and the league is coming back.
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