Key Takeaways
- • BC Partners is seeking to acquire a $50mn debtor-in-possession (DIP) loan from Saudi Arabia's Public Investment Fund (PIF), the financing that gives the owner control of the LIV Golf Chapter 11 process, according to multiple people familiar with the matter reported by the Financial Times.
- • BC Partners has quietly revived efforts for a LIV successor after publicly abandoning its "LIV 2.0" plan, having previously committed $300mn to a league contemplating up to 17 tournaments.
- • LIV has accrued roughly $5bn in financial losses since 2021, and BC is seeking to preserve these net operating losses (NOLs) as the basis for a future corporate acquisition vehicle, which may target sports-industry companies.
- • LIV's lawyers told a federal New Jersey bankruptcy court the group would move to wind down, with liquidation paperwork due by Monday, while stating it would remain open to value-maximizing alternatives.
- • PIF wants a quick bankruptcy process to exit liabilities; the latest BC concept would have PIF contribute millions to settle trade vendor claims, which may total $100mn or more, against only a $2mn pool currently set aside for unsecured creditors.
Summary
BC Partners, a private equity firm, has quietly revived its efforts to create a successor to the LIV Golf league after publicly abandoning its "LIV 2.0" plan earlier this week, according to the Financial Times. LIV Golf filed for bankruptcy in September after recording billions in economic losses when its main backer, the Public Investment Fund of Saudi Arabia, withdrew future funding. PIF previously owned 98 per cent of LIV Golf.
According to multiple people familiar with the matter, BC is seeking to acquire a $50mn debtor-in-possession loan from PIF. Such financing gives its holder control of the Chapter 11 process. BC has itself previously committed $4mn to the DIP loan alongside PIF. The deal is being structured with BC's legal counsel at Paul, Weiss. The bid remains preliminary, and it was not immediately known whether LIV or PIF were receptive. BC told counterparties it still believes a team-based global golf group will eventually thrive, even as the PGA Tour and DP World Tour have been reluctant to let their players appear in future LIV events.
According to people familiar with the discussions, the earlier LIV 2.0 plan collapsed at the eleventh hour after some players, between 15 and 40 of whom had expressed various levels of interest, demanded that BC pay out financial guarantees cancelled during the Chapter 11 process and be allowed to back out of signed commitments. BC then concluded it could not proceed under PIF's tight deadlines. The 2027 version may now look thinner than the previous 17-tournament proposal.
BC is also seeking to preserve LIV's roughly $5bn in financial losses accrued since 2021 in the US and UK. These net operating losses could later underpin an acquisition vehicle that buys profit-making businesses, some possibly in sports, and uses the losses to reduce taxable income. Strict rules govern how NOLs may be transferred. BC invested $150mn last year in ContextLogic, which has since deployed this strategy successfully, according to the FT.
In a press release on Thursday, BC said it was "disappointed that mutually acceptable terms could not be reached among the various stakeholders." LIV's lawyers told the federal New Jersey bankruptcy court that the group would move to wind down and file liquidation paperwork by Monday, while reserving the right to revisit that option if circumstances change. In the latest BC concept, PIF would contribute millions to settle trade vendor claims, which the FT has previously reported could total $100mn or more. Only a $2mn pool has so far been set aside for LIV unsecured creditors. PIF seeks a swift process that would free it from liabilities and lawsuits from golfers or vendors, with a DIP loan sale and creditor settlement allowing it to exit the case.
According to multiple people familiar with the matter, BC is seeking to acquire a $50mn debtor-in-possession loan from PIF. Such financing gives its holder control of the Chapter 11 process. BC has itself previously committed $4mn to the DIP loan alongside PIF. The deal is being structured with BC's legal counsel at Paul, Weiss. The bid remains preliminary, and it was not immediately known whether LIV or PIF were receptive. BC told counterparties it still believes a team-based global golf group will eventually thrive, even as the PGA Tour and DP World Tour have been reluctant to let their players appear in future LIV events.
According to people familiar with the discussions, the earlier LIV 2.0 plan collapsed at the eleventh hour after some players, between 15 and 40 of whom had expressed various levels of interest, demanded that BC pay out financial guarantees cancelled during the Chapter 11 process and be allowed to back out of signed commitments. BC then concluded it could not proceed under PIF's tight deadlines. The 2027 version may now look thinner than the previous 17-tournament proposal.
BC is also seeking to preserve LIV's roughly $5bn in financial losses accrued since 2021 in the US and UK. These net operating losses could later underpin an acquisition vehicle that buys profit-making businesses, some possibly in sports, and uses the losses to reduce taxable income. Strict rules govern how NOLs may be transferred. BC invested $150mn last year in ContextLogic, which has since deployed this strategy successfully, according to the FT.
In a press release on Thursday, BC said it was "disappointed that mutually acceptable terms could not be reached among the various stakeholders." LIV's lawyers told the federal New Jersey bankruptcy court that the group would move to wind down and file liquidation paperwork by Monday, while reserving the right to revisit that option if circumstances change. In the latest BC concept, PIF would contribute millions to settle trade vendor claims, which the FT has previously reported could total $100mn or more. Only a $2mn pool has so far been set aside for LIV unsecured creditors. PIF seeks a swift process that would free it from liabilities and lawsuits from golfers or vendors, with a DIP loan sale and creditor settlement allowing it to exit the case.
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