Major League Baseball commissioner Bud Selig recently threatened to invoke his “best interests” power to compel creditors of the Texas Rangers to accept an estimated $575 million bid for the team by a group which includes Hall of Fame pitcher Nolan Ryan. Some creditors oppose the bid, claiming it is below fair market value.
A threat is simply a very aggressive way of telling the other side you can make its Plan B very bad.
Here, Selig’s threat to take over the team and potentially invalidate the creditors’ liens on the team is a very bad Plan B for the creditors (and presumably worse for them than accepting the $575 million bid).
Of course, the creditors can counter Selig’s move by taking steps to undermine Selig’s leverage, thereby improving theirs. What can they do? Challenge in court Selig’s ability to invoke his “best interests” power and/or force the team into bankruptcy, which would delay any sale and most likely result in a judicial auction that may lead to a bid greater than $575 million.