Tom Hicks, co-founder of the Dallas buyout firm formerly called Hicks Muse Tate & Furst, was served notice of default from a group of lenders of his Hicks Sports Group, which owns the National Hockey League Dallas Stars and the Major League Baseball Texas Rangers.
Hicks Sports Group is negotiating with a group of 40 lenders to restructure its more than $500 million debt load. The default notice is the first step in a process that could put the professional sports teams in the hands of the lenders, a collection of large banks and smaller investment funds, according to the Wall Street Journal.
Hicks Sports Group missed a $10 million interest payment on 31 March, triggering the default. Hicks said in a statement earlier this month the company is asking the lenders “to be reasonable”.
“They need to understand that these important assets must be managed with a long-term perspective and a commitment to winning,” Hicks said in a statement.
The negotiations and default will have “absolutely no impact on operations of either team or the fan experience at its venues”. Also, the company’s financials are separate from Hick Equity Partners, the private equity arm of Tom Hicks’ business.
“Like so many other companies and institutions, HSG has been impacted by a global credit crisis, which no one could have anticipated,” according to the statement. “The company is not asking for additional money; it is only asking for full access to the interest reserve account and revolving credit line as well as some amendments in the debt covenants.”
Hicks co-founded Hicks Muse Tate & Furst in 1989, which was battered in the financial crisis that erupted after the Internet bubble burst in 2001. Hicks resigned from the firm in 2004 and was replaced by co-founder John Muse. Hicks Muse changed its name to HM Capital in 2006.
Hicks founded his own private equity firm, Hicks Equity Partners, in 2007.