Bankruptcy Blog

Golfers everywhere surely noted the recent bankruptcy filing of several LIV Golf entities. The filing comes at a critical point for the Saudi-backed professional golf league, which is seeking to restructure its business after the Public Investment Fund of Saudi Arabia (PIF) stopped funding LIV Golf. LIV Golf’s proposed restructuring would bring in new investors, convert certain player claims into equity in a reorganized company, and potentially preserve approximately $3 billion in net operating losses (NOLs). But LIV Golf has a limited window to complete the proposed transaction before its bankruptcy financing could trigger an orderly wind-down.

Key Takeaways

• LIV Golf filed for bankruptcy protection after PIF announced that it would no longer continue funding the league.
• LIV Golf has entered into a restructuring support agreement with BC Partners .
• Nine of LIV Golf’s 10 largest unsecured creditors are professional golfers, with claims ranging from approximately $1.8 million to $7.4 million.
• The proposed restructuring would give players 52.5% of the common equity in the reorganized company.
• LIV Golf has approximately $3 billion in net operating losses, which could provide significant tax value if the company successfully restructures.
• LIV Golf’s debtor-in-possession financing gives it approximately 30 days to finalize the proposed transaction and file a Plan of Reorganization. If that deadline is missed, the financing provides for an orderly wind-down through a liquidating trust.

Why Did LIV Golf File for Bankruptcy?

LIV Golf was founded in 2021 as a rival to the PGA Tour. Backed by PIF and considerable fanfare, the league established a unique tournament structure and recruited a number of high-profile professional golfers.

Since its founding, PIF has provided approximately $5 billion in equity financing to LIV Golf and holds more than 98% of the equity in the parent company. PIF also provided LIV Golf with a term loan facility, of which approximately $495 million remained outstanding when the bankruptcy filing occurred.

Although LIV Golf appeared to grow its revenue and attendance each year, the league reported substantial losses during each year of its operation. According to LIV Golf, those losses were attributable in part to startup costs and upfront guaranteed payments made to recruit players from established professional golf tours.

In April 2026, PIF announced that it would pivot its investment activity toward other economic sectors and would not continue funding LIV Golf. PIF did, however, provide LIV Golf with a secured credit facility that is short-term and matures at the end of 2026.

Without continued funding from PIF, LIV Golf began pursuing alternatives to address its financial position. The league hired investment bankers, began a marketing process, and ultimately entered into a restructuring support agreement (RSA) with BC Partners.

Who Is Funding LIV Golf’s Proposed Restructuring?

LIV Golf’s RSA provides a framework for reorganizing the company with approximately $127.5 million in term loans, $147.5 million in senior preferred stock, and $25 million in convertible subordinated preferred stock.

BC Partners would provide most of the funding, with the balance coming from other approved investors. Under the proposed restructuring, the new company’s common equity would be divided among new investors, players, and management:

• 45% to BC Partners and other potential new investors;
• 5% to players; and
• 5% to management.

PIF’s existing equity would be cancelled as part of the restructuring.

PIF would also provide approximately $49.6 million in debtor-in-possession (DIP) financing. DIP financing is financing provided to a company after it has filed for bankruptcy to help fund its continued operations while it restructures.

The terms of LIV Golf’s DIP financing give the company a relatively short period of time to complete the proposed transaction.

What Is LIV Golf’s 30-Day Bankruptcy Deadline?

LIV Golf’s DIP financing gives the company approximately 30 days to finalize the proposed BC Partners transaction and file a Plan of Reorganization.

A Plan of Reorganization is the framework submitted in a Chapter 11 bankruptcy case for how a company will restructure its debts, ownership, and operations.

If LIV Golf does not meet the deadline, the DIP financing provides for an orderly wind-down of the business through a liquidating trust. As a result, the proposed restructuring is operating under a significant time constraint.

The success of the restructuring will also depend on several important bankruptcy-law and tax-law considerations.

What Happens to LIV Golf’s Approximately $3 Billion in NOL?

One of LIV Golf’s most valuable assets is the company’s tax attributes.

At the end of 2025, LIV Golf Incorporated held approximately $3 billion in NOLs. NOLs are tax attributes that can potentially reduce taxable income in future years.

Federal tax law generally limits the ability of a new owner to use a company’s NOLs following a change in ownership. There is, however, an exception for certain companies undergoing bankruptcy reorganizations.

Under the bankruptcy exception, the limitation generally does not apply if the shareholders and certain qualified creditors of the company before the ownership change ultimately hold at least 50% of the reorganized company. That exception is particularly important to LIV Golf’s proposed restructuring.

Because the existing equity holders will have their equity cancelled under the restructuring support agreement, the proposed 52.5% common equity allocation to player-creditors appears designed to satisfy the ownership requirement necessary to preserve the bankruptcy exception for LIV Golf’s NOLs.

The treatment of LIV Golf’s NOLs is therefore closely connected to the proposed treatment of its player-creditors.

How Will Creditors Vote on LIV Golf’s Plan of Reorganization?

Bankruptcy law requires creditors to vote on a proposed Plan of Reorganization.  Creditors are grouped into classes based on the nature and priority of their claims, with similarly situated creditors typically placed in the same class.

A class is generally deemed to accept a plan if at least two-thirds in amount and more than one-half in number of the allowed claims voting in that class vote in favor of the plan.

For LIV Golf, this voting process creates an interesting dynamic in light of the NOL treatment. LIV Golf has a limited amount of time to reach an agreement with its players regarding the rejection of their existing contracts. If those contracts are rejected, the resulting bankruptcy claims could potentially receive common stock in the reorganized company.

There is an additional complication: A claim cannot be transferred or assigned for purposes of qualifying for the bankruptcy exception to the general limitation on NOLs.

As a result, LIV Golf will be working furiously in coming days to try to get players to sign on to the concept of the RSA, but doing so will create commitments for the players through the bankruptcy and beyond.