LIV Golf’s top-ranked professional, Jon Rahm , is quitting the bankrupt golf tour and views its proposal to give players a majority ownership stake in the newly established enterprise as “unacceptable,” according to his lawyer.
The company, backed by Saudi Arabia’s sovereign wealth fund, has been trying to convince players, including several prominent holdouts, to stick with the company as part of a plan to cut costs and recapitalize. LIV Golf, which had big ambitions to challenge the PGA Tour, filed for Chapter 11 bankruptcy last month.
Rahm is talking to the league about a potential separation agreement, his attorney John Beck told the judge overseeing the insolvency case during a court hearing Wednesday.
“He will not be participating going forward,” Beck added.
Lawyers for golfers Rahm, Sergio Garcia and Cameron Smith appeared at a bankruptcy court hearing Wednesday to protest the company’s proposal to cancel their old contracts as part of a plan to negotiate new deals.
Garcia and Smith are among holdout golfers who sent lawyers to the court hearing in order to ensure that if their current contracts are terminated, they will have maximum flexibility to negotiate new deals, bankruptcy attorney Michael Cooley said during the hearing. Cooley and the lawyer for Garcia did not say whether their clients would be joining the new venture known as LIV Golf 2.0.
“All players should be on the same footing,” Cooley told US Bankruptcy Judge Michael Kaplan. “There is a pivotal question in this case about whether players ultimately will join LIV 2.0.”
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Kaplan agreed to delay the contract rejection question for the golfers who appeared at the court hearing and gave LIV Golf permission to end the rest of the contracts.
In order to join LIV Golf 2.0, the players’ old contracts must first be canceled as part of the bankruptcy case. A canceled contract would give players bankruptcy claims for unpaid money they might be owed.
Under LIV Golf’s proposal to exit bankruptcy, the new players would trade their old contracts for deals that give them ownership stakes in the new venture. LIV Golf has said that if the proposal goes forward, players would own a majority of the company and have other benefits.
Earlier this week, the credit arm of BC Partners agreed to a $300 million financing package to help LIV Golf restructure.
Representatives for LIV Golf and BC Partners did not immediately return a request for comment.
The case is LIV Golf New Jersey LLC, 26-20189 , US Bankruptcy Court, District of New Jersey.