L-I-V-I-N and DISHing it Out

Below is our initial take on recent bankruptcy-related developments:

LIV Golf files for bankruptcy protection, enters ‘next phase’ | ESPN

LIV Gold has voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court of New Jersey, alleging between $100-500 million in assets and $500 million to $1 billion in liabilities. The league has said in past statements that it plans to return to competition in 2027 and is expected to be majority owned by its players.

S&K Take:  The writing had been on the wall for LIV since an April announcement that its equity sponsor, the controversial Saudi PIF, would cease funding the tour.  In June 2026, the PIF put a first lien lending facility in place and is now LIV’s largest secured creditor to the tune of $495 million.  According to the Debtors, this is not a free fall filing or liquidation, but instead a reorg driven by tight liquidity.  What is that reorg you ask?  That is an incredibly interesting question.  The Debtors have an RSA with an exit backed by BC Partners, which is willing to provide $300 million (comprised of $127.5 million in first lien debt, $147.5 million in preferred equity, and $25 million in subordinated convertible preferred equity) if LIV is able to thread the needle and live up to the terms of the RSA, which is easier said than done.  There are multiple hurdles.  First, the PIF has to sign on to the RSA within 10 days (on terms acceptable to BCP).  Next, two thirds in amount and one half in number of eligible players holding claims must sign on to the deal within 35 days.  The players are the most critical here, since other than the obvious (the players are the product LIV sells) the RSA is contingent on preserving $3 billion in NOLs, which requires that the largest creditors (i.e. the players) control the new company.  This is achieved by the requisite number of players signing on, who are then granted 52.5% of the equity in the reorganized company.  BCP also requires that sponsor commitments remain.  Sounds like a layup?    The UST will try to form a committee, although that would presumably be comprised of the players, and query how interested they will be in serving given the structure.  There is also a special committee that is already conducting and investigation.  This is a fascinating case (we didn’t even cover team ownership and NIL issues!) we will surely take a mulligan and revisit this one soon.

Dish Creditors Seek Trustee, Allege Counsel Conflict | The Wall Street Journal

Dish Wireless is facing challenges in its Chapter 11 bankruptcy case after unsecured creditors moved to appoint an independent trustee and disqualify legal adviser White & Case, alleging conflicts of interest and value-diverting transactions that benefited parent company EchoStar and Chairman Charlie Ergen. Creditors claim billions of dollars in assets were transferred beyond their reach prior to the filing, while Dish disputes the allegations, arguing that replacing management would increase costs and further strain the company’s liquidity.

S&K Take: The unsecured creditors’ committee in the DISH cases have launched a full-scale attack on the DISH prepackaged plan.  The committee has filed a motion for the appointment of a chapter 11 trustee, or, in the alternative, for termination of the Debtors’ exclusive period within which only the Debtors’ can file a plan.  The committee alleges that the Debtors’ governance is flawed and that a special committee appointed by the company to resolve alleged conflicts of interest has not been sufficient to cure any defects.  The committee concurrently has objected to the Debtors’ choice of counsel, arguing that counsel is similarly conflicted.  The committee faces an uphill battle, as these issues are often resolved in the Debtors’ favor, but given the stakes at hand and potential precedential value of the decision, is something we will closely monitor.