U.S. bankruptcy court ok’s cubs sale

The Chicago Cubs baseball team will soon be under the new ownership of the Ricketts family, who today received court approval to acquire the team for $845 million from the Tribune Company, a media conglomerate trying to emerge from bankruptcy.

Under the deal, the Ricketts family, which made its fortune from the TD Ameritrade Holding Corp business, will acquire under a new company the Cubs, Wrigley Field and its stake in a sports television network.

As part of the transaction, the Cubs are expected to file for bankruptcy on October 12 to shed any claims by creditors of Tribune, according to Bryan Krakauer, an attorney for law firm Sidley Austin, which is representing the Tribune.

“All that is left is for the owners to officially vote on the transaction. We’ve been informed it could happen as soon as October 5,” Krakauer said. “We have every reason to believe it will be approved.”

The deal is designed to be recognized as a disregarded transaction for tax purposes, potentially allowing the Tribune to avoid paying tax on the gain in value of the team.

The Tribune, which also owns the Chicago Tribune and Los Angeles Times newspapers, bought the Cubs in 1981 for $20.5 million.

The Washington Post reported that a leading tax specialist expects federal authorities to challenge the deal’s status.

After certain adjustments, Tribune expects to end up with $740 million and a 5 percent stake in the new company that will own the Cubs. That money will go toward paying off Tribune’s debt, which was estimated at nearly $13 billion when it filed for bankruptcy last year.

The Tribune has said it hopes to exit bankruptcy this year, although it still faces challenges.