Explain the Chicago Cubs bankruptcy

Thank you. Now it makes sense. As far as the Cubs/Tribune Co go, the Cubs are not filing bankruptcy on their own behalf - in contrast to the bankruptcy filings of Phoenix Coyotes hockey team at present and of the Seattle Pilots baseball team 40 years ago - despite what the originally quoted news source said, rather, the Tribune Co is selling the Cubs under the aegis of the bankruptcy court and its trustee, with the proceeds ultimately going to the Tribune Co’s creditors (at a penny on the dollar, no doubt).

This is a very good explanation. I’ll only add that I believe there are limits on who can file bankruptcy. If a company’s assets exceed their liabilities and they are paying their obligations (debt service etc.) then I don’t believe they are even eligible to file for bankruptcy.

I thought that too, but apparently that isn’t the case.

As was said upthread and as pointed out in this good blog article, “Will the Cubs Get Tagged Out in Bankruptcy?” the Cubs are considering filing a Section 363 Bankruptcy. This is a good discussion of Section 363 sales: A Pathology of Section 363 Sales (Not as Simple as They Look). This article says that when a parent sells its sub’s stock in a 363 sale, the parents’ creditors can reach the sub stock despite the 363 sale. Bankruptcy Section 363 Sales: Buyers Beware of “Free and Clear” Sales of Non-debtor Subsidiaries

All very interesting. Thanks everyone!