US court conditionally approves LIV Golf reorganization plan, averting liquidation

A US court has conditionally approved LIV Golf's corporate reorganization agreement.

Golf Channel, Reuters and other major outlets reported Thursday that a federal bankruptcy court in New Jersey approved the reorganization plan reached between LIV Golf and private equity firm BC Partners. The ruling clears a path for LIV Golf to escape the threat of liquidation and continue operating through the 2027 season.

At the heart of the court-approved plan is a fresh capital injection led by a British private equity consortium under BC Partners, which will provide roughly $300 million in exit financing as the lead plan sponsor. Saudi Arabia's Public Investment Fund has also agreed to contribute $49.6 million in debtor-in-possession bridge loans to support operational stability until the restructuring process is complete.

Despite the conditional approval, significant hurdles remain before a full recovery. The court set as a precondition that excessive debt and player guarantee amounts under existing contracts be renegotiated downward, putting the league on a collision course with its highest-paid stars.

According to local media reports, key players including Jon Rahm of Spain and Americans Bryson DeChambeau and Dustin Johnson have refused to accept renegotiated or reduced contract terms, with some demanding contract termination. The signing bonuses promised at the league's launch now face steep cuts or conversion into equity stakes under the bankruptcy protection process.

LIV Golf has said it aims to exit Chapter 11 proceedings by early 2027 and restructure the league around a sustainable business model. David Orlofsky of AlixPartners, appointed as restructuring officer, is pursuing measures to improve profitability, including scaling back unprofitable tournaments and selling team franchise rights.

Since its 2022 launch, LIV Golf had used vast oil-backed funding to poach marquee names from the PGA Tour, but the league fell into a severe liquidity crisis after the Public Investment Fund halted further capital injections. LIV Golf ultimately filed for Chapter 11 bankruptcy protection in early September.

Meanwhile, LIV Golf's financial troubles are also reshaping the landscape of merger talks with the PGA Tour. With LIV Golf transitioning to private equity ownership after having sought to survive independently, attention is now turning to how negotiations over a potential merger with the PGA Tour and the DP World Tour will unfold.