LIV Golf’s CEO, Scott O’Neil, says the league is close to locking down funding for 2027. But, ironically, he has not named the investor the league has signed a term sheet with. The silence lands on top of months of speculation that LIV is already heading towards bankruptcy. The league has burned through roughly $5.3 billion in Saudi Arabia’s PIF’s money since 2022. It also includes a $266.6 million injection in February, maintaining a steady burn rate of roughly $100 million a month. Now, Golfweek’s Tim Schmitt asked Joe Bain, a restructuring attorney at Jones Walker LLP, what happens next if that funding push falls short?

“On the other hand, if they don’t get that buy-in, worst-case scenario, you could see a Chapter 11 filing sooner rather than later.” Joe Bain said, speaking to Golfweek,

While Bain explained that restructuring could be the best solution, he made one thing clear. If that does not work out and LIV has to file for bankruptcy, they have two routes to go, and they must choose their approach wisely. Chapter 7, which liquidates the company, or Chapter 11, which lets it keep operating while it restructures debt.

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Chapter 11 is the realistic option, and it has its own advantage, which is control. Operating as a debtor-in-possession under Chapter 11, LIV Golf’s management, rather than a court-appointed liquidator, would retain operational control to determine which executory contracts to assume or reject, subject to court approval.

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The flip side of Chapter 11, which is a major disadvantage, is the cost. The league would have to pay its own legal fees plus the fees of any creditors’ committee the court appoints. All of that is drawn from the same money it is trying to protect. But that’s what Bain suggests. Filing for bankruptcy is an expensive option. Furthermore, Bain highlights that filing itself can hurt a brand’s standing with fans and broadcasters, which matter most for a league that’s trying to win both over.

In addition to that, the player contracts carry so much weight. Bain pointed to section 365(a) of the Bankruptcy Code, where a debtor, subject to the bankruptcy court’s approval, “may assume or reject any executory contract or unexpired lease of the debtor.” A rejected contract counts as a breach, leaving the player with a claim for damages against the bankruptcy estate rather than the full benefit of the original contract.

He added that the risk is pushing LIV toward a different idea entirely, one that’s already in discussion – converting what it owes players into equity in the league instead of cash. He compared it to Formula One, where early stakeholders like Toto Wolff turned a 30% equity buy-in at Mercedes F1 in 2013 into a multi-billion dollar fortune.

The risk, however, could play out differently for LIV’s biggest names. Bryson DeChambeau looks fully committed to the league’s future, though his contract ends after 2026. Jon Rahm has seemed more hesitant. The Spaniard is likely to keep his options open. Because Rahm is reportedly still owed roughly $150 million on his back-loaded LIV contract, which was reported to be worth more than $300 million, a bankruptcy proceeding could make him one of the league’s largest unsecured creditors.