LIV Golf’s latest bankruptcy hearing offers timeline for league’s future | News
LIV Golf’s future has a timeline.
During a Chapter 11 bankruptcy hearing in federal court on Wednesday, U.S. Bankruptcy Court of New Jersey Judge Michael B. Kaplan asked LIV Golf’s attorney when they will know if they are “toggling to wind down or if 2.0 is going forward.” LIV’s attorney, Robert Fitzgerald of Gibson Dunn, said they “anticipate that decision will be made by the end of the month.”
Wednesday’s hearing was largely a procedural one in which Kaplan approved the restructuring support agreement (RSA) between LIV Golf and BC Partners Global. The RSA is an important step for LIV as it looks to survive after losing funding from the Saudi Arabian Public Investment Fund (PIF) and reinvent itself as a 2.0 version. The agreement between LIV and BC Partners Global includes $300 million in cumulative financing to help the league try to start anew. The term sheet calls for players to receive equity in the league, specifically “52.5 percent ownership” as well as signing bonuses. BC Partners and other potential investors will hold 45 percent, and management will hold 2.5 percent.
“Approval of [the agreement] is an important step, but it does not dictate, necessarily, confirmation of a plan or approval of a disclosure statement,” Judge Kaplan explained during Wednesday’s hearing. “In approving [the agreement] the court is not ruling on the validity of claims, except limited carveouts for certain sponsor protections, nor any other aspects of a proposed plan.
“This is an important first step in order to really identify viable paths for the debtor, either through continuing operations or a wind-down.”
But while Wednesday’s hearing was mostly procedural, LIV’s attorneys did take time to accuse the DP World Tour of player interference after CEO Guy Kinnings told BBC Sport on Monday that the European circuit would ban golfers who compete on LIV 2.0 from teeing it up on their tour.
“We’re continuing to monitor this situation very closely and we’re quite concerned by it frankly,” Fitzgerald said about the DP World Tour’s position. “The timing in particular strikes us as a clear attempt to interfere with our process with our players and potentially our reorganization writ large.
“It also raises a lot of the same anti-competitive concerns that LIV has expressed previously regarding the way competing leagues have sought to box out and punish market participants, namely these players, from participating in LIV and really only LIV.”
In previous years, players like Jon Rahm and Tyrrell Hatton received conditional releases that let them play on both the DP World Tour and LIV Golf. Those releases also helped those players maintain their Ryder Cup eligibility. That will no longer be allowed in 2027 should LIV Golf 2.0 get off the ground.
“Player freedom is the reason LIV Golf was created, and it’s the foundation of LIV Golf 2.0, a league built around its players,” Fitzgerald said. “LIV has been vocal in its belief in free agency and that the best players should have greater flexibility to compete across the ecosystem. It’s unfortunate that another tour is taking an opposite view and pressuring our players with a false choice.”
Judge Kaplan acknowledged that he had heard Kinnings’ comments and that they do “raise concerns.”
On Wednesday, Kaplan also approved LIV Golf’s motion to reject the current contracts of 19 golfers. LIV said the contracts “do not reflect the contemplated compensation structure under LIV 2.0.” The list of golfers, which includes Bryson DeChambeau and Dustin Johnson, had previously asked for clarity on whether the contract rejection would allow them to have conversations with third parties about their playing future. LIV Golf has said rejecting these contracts is a necessary step in restructuring and negotiating new deals for the league’s 2.0 version.
Last week, Jon Rahm’s attorney told the court that the two-time major winner would not participate in LIV 2.0 because he found the terms “unacceptable.” David Puig, Abraham Ancer and Adrian Meronk have also exited in the past week.
The next hearing in LIV’s bankruptcy case is scheduled for Oct. 20. The agreement between LIV Golf and BC Partners set an Oct. 25 deadline for players to commit to LIV Golf 2.0, but it allows BC Partners to waive that deadline. Under the RSA between LIV Golf and BC Partners approved Wednesday, LIV Golf must sign a “requisite number of players,” defined as the number “necessary to ensure the continuation of the Company Parties’ business as a bona fide golf league.” Put simply, BC Partners will now decide whether LIV Golf has earned enough commitments and has signed the right players to do business.
