10/12 Cubs file for bankruptcy
The Cubs filed for bankruptcy on Monday, a move designed to help the Tribune Co. transfer the team to its new owners. The Cubs are not in financial trouble; the move is connected to the Tribune Co.’s own Chapter 11 bankruptcy case that began in December.
Now that the Tribune Co. has finalized a deal to sell the team to the Ricketts family, it is passing the Cubs through bankruptcy court to give the new owners comfort that creditors in the original case have no claim against the company. The Tribune Co. filed for bankruptcy in December, and at the time, was $13 billion in debt.
The Cubs’ stay in bankruptcy is expected to last one day. The judge in the Tribune Co. case has scheduled a hearing for Tuesday.
The judge already has approved Tribune Co.’s transaction with the Ricketts family. Under the terms of the deal, the Cubs, Wrigley Field and 25 percent of Comcast SportsNet Chicago will be placed in a limited partnership, and the Ricketts will own 95 percent of that. Tribune Co. will retain 5 percent.
The Ricketts family will contribute $823 million to the partnership. Tribune Co. will receive about $740 million after taxes and other adjustments.
Once the bankruptcy judge clears the Cubs’ case, the Ricketts family was expected to close the deal by the end of October.
– Carrie Muskat