Judge Michael Romero heard closing arguments yesterday in the USA Cricket bankruptcy case in Denver, eight days after theMay 18 evidentiary hearing at which trustee Mark Dennis and ACE CEOJohnny Grave testified. The court will now decide whether to approve the settlement and the post-petition financing that, together, the trustee and ACE have argued is the only path through bankruptcy to USA Cricket’s emergence and reinstatement with the International Cricket Council. The objectors — the National Cricket League, former USAC general counsel Sesha Kalapatapu, and two USAC directors from the suspended board — argued that the trustee had failed his evidentiary burden and that the settlement reaffirms the very contract that produced the bankruptcy.
Romero did not rule from the bench. The case will go under advisement.
“The most unusual settlement I’ve ever been asked to approve”
Roughly 35 minutes into the trustee’s opening argument, Romero interrupted to express the unease that would shape the rest of the afternoon. The judge had been pressing the Trustee’s counsel Adam Hirsch on what efforts Dennis had made to negotiate the term sheet, to explore alternative financing, and to push back on what Romero described as a one-sided contractual structure. Hirsch’s answers — that Dennis had tested the boundaries, that ACE had insisted on certain core terms, that Dennis had no realistic alternative — did not satisfy the court.
“This is the most unusual settlement agreement I’ve ever been asked to approve in my 22 years on the bench,” Romero said, adding that he was “somewhat suspicious and uncomfortable with this one.”
He was careful, immediately, to clarify what he was and was not saying. It was not necessarily meant to be a criticism of Mr. Dennis as the judge said he had been “a fan of the trustee in a number of other cases. But I don’t see the effort to do anything more than accept a one-way contract… to keep this thing alive to confirm this thing for another 50 years. That’s what I’m looking at.”
When ACE counsel Amalia Sax-Bolder rose to argue minutes later, she began by conceding the framing. “An unusual case,” she told the court. “Probably the most unusual case I’ve ever been involved in.” Her argument was that despite the unusual surface — a pre-petition contract being reaffirmed through a bankruptcy settlement, with the contracting parties also being the parties to the bankruptcy dispute — the underlying transaction was a familiar one. Bankruptcy courts routinely decide whether to approve or reject executory contracts; the difference here was the size of the contested claim and the long-term commercial structure attached to it.
A contract dispute inside a bankruptcy proceeding
The unusual quality of the case is structural. USA Cricket and ACE have been in disagreement, in various forms, since at least 2021. A succession of breach letters, settlement letters, and disputed reimbursements culminated in USAC’s August 2025 attempt to terminate the Binding Term Sheet on the basis that ACE had failed to perform. ACE responded with a $150 million arbitration demand and a state-court action in Boulder. The bankruptcy filing followed on October 1, 2025.
The dispute that led USAC into bankruptcy was, at its core, a contract dispute. Whether ACE had performed under the Term Sheet, whether USAC’s termination was effective, whether the underlying agreement was enforceable as drafted — these are questions a court would ordinarily resolve through litigation on the merits. A bankruptcy court is not the forum for that inquiry. It is the forum for evaluating whether the trustee’s settlement of that dispute is fair, equitable, and within his business judgment.
That distinction was the analytical fulcrum of the afternoon. The trustee and ACE argued the bankruptcy court should evaluate the settlement on bankruptcy terms — was it reasonable, given the estate’s $32,000 in cash, the absence of alternative financing, and ACE’s ability to block any plan. The objectors argued the bankruptcy court could not approve a settlement of an underlying contract dispute without an evidentiary record adequate to assess the merits of that dispute. Romero appeared to be wrestling with both framings throughout. He repeatedly reminded the room that the matter was a settlement motion, not a confirmation hearing or a contract trial. But he also pressed Hirsch on the substance of what Dennis had done in a way that suggested the bankruptcy-only framing did not fully resolve his unease.
The trustee’s case: this or nothing
The opening argument by the trustee’s attorney (Hirsch) framed the choice in stark terms. USAC entered bankruptcy with no operating revenue, ICC suspension preventing it from sanctioning events, and litigation from ACE that would leave ACE in a position to block any plan of reorganization. Dennis, on his appointment, approached both the ICC and ACE for debtor-in-possession financing. The ICC declined. ACE eventually agreed. The settlement that emerged is the only financing the estate has been able to secure.
On the $150 million ACE claim, Hirsch argued that Dennis’s investigation had concluded the dispute was complex, factually contested, and not amenable to a quick resolution. Even if Dennis litigated and succeeded in reducing it substantially, ACE would remain the largest creditor and would retain a blocking position on any plan. The settlement, by withdrawing the claim, removes that obstacle. On the assumption of the Binding Term Sheet, Hirsch argued the contract is the platform on which US cricket’s commercial architecture has been built for seven years; without it, USAC has no commercial partner, no path to revenue, and no foundation for a confirmable plan.
ACE’s attorney Sax-Bolder built on the bankruptcy framing. Section 20 of the Binding Term Sheet, she argued, contains a provision that converts the term sheet itself into the definitive agreement if no long-form is signed by the deadline — a deadline that passed in 2019. ACE paid the $1.092 million advance the section requires upon that conversion. “Upon payment of that advance,” she told the court, “the term sheet is automatically deemed to serve as a definitive agreement and will be binding on the parties for the remainder of the term.” The Term Sheet, in her framing, is not a placeholder. It is the operative agreement.
The objectors’ case: capitulation, not settlement
NCL counsel Daniel Glasser opened the objectors’ case. “The trustee is asking the court to bind the estate to a contract that has always been problematic,” Glasser said, “and to bind the estate for the next 47 years. To resolve a $150 million proof of claim that hasn’t been tested. To grant exclusive long-term commercial rights to a single creditor. To authorize post-petition financing from that same party. This is not an ordinary Rule 9019 motion.”
Glasser’s case ran across four arguments: that Dennis had failed to develop an evidentiary record sufficient to evaluate the $150 million claim — no valuation, no expert work, no formal estimation, and a conceded acknowledgment that the only theory of damages was lost profits, despite ACE’s own joinder stating ACE has never achieved a net profit since 2019; that Dennis had failed to investigate or value USAC’s own affirmative defenses and counterclaims; that the settlement effectively functions as a sub rosa (i.e. “backroom”) plan, locking in commercial terms and financing arrangements that should be evaluated through plan confirmation; and that the trustee had failed to seriously test the market for alternative financing.
Sesha Kalapatapu, appearing pro se as a creditor and former USA Cricket counsel, argued the settlement was a capitulation, not a compromise. He focused on a series of provisions that, in his reading, conceded ACE’s contested positions outright. The settlement includes an acknowledgment that ACE has “complied in all material respects with its obligations under Section 5” of the Term Sheet — the stadium-construction and High Performance Center obligations that were one of the main grounds for USAC’s termination. “When you settle something that’s disputed,” Kalapatapu said, “you ordinarily leave that language to say A alleges this. There’s no testimony from the trustee validating this provision. The trustee himself didn’t say, well, I think ACE actually did build six stadiums. So why is the trustee agreeing to language that completely acknowledges ACE’s position?”
Kalapatapu also pressed an inconsistency in the trustee’s own testimony. Dennis had told the court that the term “commercially reasonable efforts” — central to ACE’s stadium obligations — was so difficult to define that litigating the question would be expensive and uncertain. But Dennis had then used the same phrase in the settlement itself, in defining USA Cricket’s commitment to pursue ICC reinstatement. If the term is too vague to evaluate ACE’s performance, Kalapatapu argued, it cannot simultaneously be precise enough to bind USAC’s.
The board question
Romero’s sharpest pressure on the trustee’s case concerned the timing and structure of USAC’s board reconstitution. The settlement contemplates that a newly constituted independent USAC board will take over the long-form negotiation after USAC emerges from bankruptcy. But the settlement requires that any long-form agreement be “consistent with the economic and structural terms of the existing Binding Term Sheet” — meaning the new board cannot revisit the substantive issues that produced the dispute.
“If you get that new board in place, they’re already basically hand-tied by the ACE contract, right?” Romero asked Hirsch. “How can they challenge or change any of the terms that they think are not in the best interest of USAC?” Hirsch’s response — that the contract has been in place for seven years and the settlement is not a new agreement — did not appear to satisfy the court. “The first problem I’ve got right here,” Romero said, “is the fact that constituting a board after an agreement has been signed is kind of backwards. Usually it’s the board in place that signs the contract.”
The judgment-call question
Late in the hearing, Romero framed the question he has to decide in arithmetic terms. “On a scale of one to ten,” he asked Hirsch, “is litigating, taking it to trial, a ten — and doing no research at all is zero — where was the investigation in your mind that Mr. Dennis did on that scale of one to ten?”
Hirsch’s answer: “I think it’s where it needs to be. For Rule 9019, Mr. Dennis is in the middle. It’s in the middle because it’s where it is for this estate, given the resources Mr. Dennis has.”
That exchange captured the afternoon. The bankruptcy standard is reasonableness, not optimality. The trustee does not need to have made the best possible decision; he needs to have made a reasonable one given the resources and information available. Romero pressed on what Dennis had not done — no stadium visits, no formal valuation, no market test. Hirsch’s answer was that under the standard the court must apply, the trustee did enough.
Romero made clear toward the end that he understood the narrow question before him. “I’m very focused on what I’ve got to do,” he said. “What I’ve got to look at — was Mr. Dennis’s effort, Mr. Dennis’s judgment reasonable. If it is, it is. If it isn’t, it isn’t.” He thanked the parties, said he would move quickly given the timetables, and called a recess. “We will jump on this immediately.”
The American and global cricket communities await.
