UPDATE: UH files objection against XFL, seeking to preserve cure amount
Update: The XFL was sold to a group that includes former WWE star Dwayne “The Rock’’ Johnson for $15 million on Monday morning according to Sportico.
Johnson partnered with the group RedBird Capital to buy the league just hours before an auction was set to take place to find a new owner for the XFL.
The transaction is pending a bankruptcy court approval and if the closing conditions are met, is expected to close on or shortly after Aug. 21 according to a court filing on Monday.
In addition to the $15 million that Johnson and RedBird Capital bought the XFL for, the party will also have to pay “certain specified liabilities” and “cure amounts of up to $8.5 million,” according to Monday’s court filing.
The University filed a limited objection and reservation of rights against Alpha Entertainment, which owns the XFL, to the federal bankruptcy court in Delaware last Friday.
According to the motion, the University and Alpha negotiated an agreement for a cure amount of $729,444.25, and Friday’s motion is to make sure an additional $112,500 (for a total of $841,944.25) is guaranteed to be due upon an assumption of a new owner of Alpha.
According to Friday’s court filings, the University says the additional amount it is seeking to preserve is due under the Venue Use Agreement. The additional money UH is seeking to preserve was used for the new FieldTurf that was installed in February according to the court motion.
From Friday’s court filing:
“Upon information and belief, the Parties are in agreement of a cure amount of $729,444,25. The University asserts that an additional $112,500 is due (for a total of $841,944.25) under the Venue Use Agreement for field replacement which has already occurred and costs and expenses have already been incurred. While the second installment payment of $112,500 is not due until May 2021, the University is aware that an argument could be made by a prospective purchaser in a sale that such amount accrued pre-petition and therefore should have been included in the cure amount. As a result, the University is filing this Objection to preserve the issue.
WHEREFORE, the University respectfully requests that the Court permit the University to preserve the issue that the referenced $112,500 shall be due and owing under the terms of the Agreements upon any assumption and assignment, and grant the University such other and further relief, both at law and in equity, to which the University may justly be entitled.”
According to the motion, the debtor (Alpha) was originally tied to a Practice Facility Agreement and a Venue Use Agreement for the use of TDECU Stadium.
Following the XFL’s file for bankruptcy on April 13, those agreements were included in its motion to reject certain “unexpired leases and executory contracts” according to the latest court filings.
After that rejection motion was filed, the University and Alpha began negotiations and agreed to a cure amount that did not include the additional $112,500 it says in the court motion.
According to Friday’s court filings, the payment for the $112,500 is not due until May 2021. Texas Attorney General Ken Paxton’s office is handling the case on the University’s behalf.