LIV Golf Bankruptcy Plan Would Make Players Part-Owners of League

LIV Golf's Chapter 11 bankruptcy filing proposes turning the league over to its players as part-owners, an arrangement a Harvard bankruptcy law professor calls unusual because the deal depends on player buy-in rather than a straightforward sale.

What does LIV Golf's bankruptcy plan actually offer?

Under the term sheet filed in U.S. Bankruptcy Court for the District of New Jersey, players who sign on to "LIV 2.0" would receive amended contracts with signing bonuses, league equity and the return of certain NIL rights. Players would hold 52% of the reorganized league, with BC Partners at 45% and management the remaining 2.5%. It is not yet clear whether players would also be paid cash for money already owed to them under their pre-bankruptcy contracts.

Top players including Jon Rahm and Bryson DeChambeau are listed among LIV's 30 largest unsecured creditors, owed millions in player-contract payments the league has not made.

Why is this bankruptcy considered unusual?

Jared A. Ellias, a corporate bankruptcy professor at Harvard Law School, told USA TODAY Sports the restructuring is unusual because it hinges on convincing the same players LIV owes money to become owners of the new entity. "This is very much not a done deal," Ellias said.

The plan asks the players LIV already owes money to become the ones betting on its future.

Bankruptcy also lets LIV cancel contracts it no longer wants to honor. Players whose deals are dropped would still be owed damages from the pre-bankruptcy claims, but there is no guarantee how much money will be left to pay them. BC Partners, as a creditor and preferred shareholder, would rank above players in the new capital structure, meaning players carry more downside risk if LIV 2.0 struggles.

What happens next?

BC Partners and PIF have 35 days from the Sept. 8 filing to reach agreement with a required number of players, though Ellias said talks could run longer, and it is possible the players hire an attorney to negotiate collectively. A hearing on the restructuring and PIF's bridge loan must be held within 10 days of the filing, and any final agreement still needs approval from Judge Michael Kaplan. PIF, which has poured more than $5 billion into LIV since 2022 and currently holds a 98.48% stake, would no longer fund the league at that level going forward.