The Official Committee of Unsecured Creditors for Alpha Entertainment, the XFL's parent company, has filed a motion to stop the sale of the XFL's assets to Alpha Acquico LLC.
Alpha Acquico LLC is the company registered to The Rock, Dany Garcia, and Gerry Cardinale’s RedBird Capital, which purchased the XFL for $15 million prior to its bankruptcy auction on Monday.
According to PWInsider, a 13-page motion was filed asking the court to pause the sale citing Alpha Entertainment "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 proposed APA, however, does not reflect such terms and seeks to strip the estate of valuable assets for no consideration. As such, the Committee has significant concerns that the Sale contemplated with the Proposed Buyer does not satisfy the sound business purpose test, and is not in the best interests of the Debtor's estate."
Essentially, creditors are concerned that the XFL assets are being sold at a lesser value than what they are worth. Creditors could end up receiving nothing or very little from the sale and extra assets are included with this sale that were not part of the financial evaluation of Alpha Entertainment when Chapter 11 bankruptcy was filed. The group wants the sale to be re-worked so terms are better for creditors who are still owed money.
Alpha Acquico's purchase of the XFL is subject to bankruptcy court approval at a hearing this Friday, August 7. Assuming that closing conditions are satisfied, the sale is expected to close on or shortly after August 21.
- From The Web