LIV Golf Files For Chapter 11 Bankruptcy To Restructure League

Chapter 11 Restructuring

According to LIV, the restructuring is intended to give LIV Golf the time and framework needed to address prior financial obligations while completing the announced transaction with BC Partners. Chapter 11 bankruptcy is a court-supervised process in the United States that allows companies to address their financial obligations under supervision of the specific bankruptcy court.

Chapter 11 proceedings were commenced in the U.S. Bankruptcy Court of the District of New Jersey by LIV Golf on Tuesday. LIV Golf characterized the filing as a step in transitioning away from its legacy business model to establish a more sustainable structure for the future.

In a press release, LIV Golf CEO Scott O’Neil stated, “This process gives us the structure and time to pursue a landmark transaction and begin the next chapter of LIV Golf – one built around the fans, an innovative, player-first ownership model, and a part of the global golf ecosystem. We are excited about what lies ahead and yet, there is still much to accomplish in the months ahead. We believe deeply in LIV Golf’s future, the opportunity in front of us, and the people who will help us realize it. We are grateful to our players, the incredible team at LIV Golf, our Board, BC Partners, and our partners all over the world standing tall with us, and we thank them for their belief in our next chapter.”

Restructuring Agreement with BC Partners

Central to the announcement is a restructuring support agreement with BC Partners. Under the agreement, BC Partners and other potential minority investors are expected to provide exit financing and serve as a plan sponsor following LIV Golf’s emergency from the Chapter 11 proceedings. The agreement allows LIV Golf, along with BC Partners and other potential minority investors to negotiate and agree upon the terms of claims and the course of the bankruptcy process, and serves as a written memorialization of those agreements.

The transaction is designed to preserve LIV Golf’s operations and create a structure to support long-term operation of LIV Golf. However, the transaction is not yet complete, as it remains subject to court approval. It’s unclear whether the financing that will be provided by BC Partners will be structured as a loan, whether such a deal is contingent upon the other potential minority investors mentioned, and/or whether player commitment is also a contingency.

Player Owned Model

Under the proposed transaction, LIV Golf 2.0 would become majority owned by its players. According to the press release, LIV Golf remains in advanced discussions with players about the ownership structure.

LIV themselves describes the proposed ownership arrangement as potentially the first global sports league majority owned by its players. It would make LIV one of the most unusual ownership structures in professional sports. However, it’s still unclear what that ownership structure would look like or how it would work.

According to court filings, some of LIV Golf’s biggest stars are still owned millions of dollars. Jon Rahm, Bryson DeChambeau, Dustin Johnson, and Cameron Smith are some of the players owed. It remains to be determined how existing LIV player contracts will be treated under the restructuring.

LIV Golf states they intend to emerge from Chapter 11 proceedings in early 2027. Such a timeline would be contingent on the restructuring process and court approvals. The 2027 date appears to be the league’s proposed plan, rather than a concrete milestone date.

Of note, the PIF has agreed to provide $49.6 million in debtor-in-possession financing, which is intended to support LIV Golf as it moves through Chapter 11 proceedings. Such an agreement is still subject to court approval.