Jon Rahm will leave LIV Golf after deeming the proposed terms for LIV 2.0 “unacceptable”, his lawyer has told a bankruptcy court hearing.
The league, which filed for Chapter 11 bankruptcy protection in the United States in September after Saudi Arabia withdrew its multibillion-dollar funding, has secured a possible $300m in financing from BC Partners Credit in order to try to move forward with the 2027 season.
Rahm’s lawyer, John Beck, told the hearing the 31-year-old Spaniard “independently reviewed the terms of LIV 2.0 and determined those terms are unacceptable as to him”.
It was later said that LIV and Rahm’s representatives are “in advanced discussions for a consensual separation agreement between Mr Rahm and LIV”.
It is hoped this will be finalised by a court hearing on 5 November.
LIV’s participants are owed at least $45m (£33m) and have the option to leave.
However, the agreement secures an extension for the league to discuss terms with its players, with talks now open until 25 October.
Documents outlining the money owed to LIV Golf’s creditors, with the 30 largest unsecured claims, show that two-time major winner Rahm tops the list with an unsecured claim of $7.5m (£5.5m).
BBC Sport understands there is no obligation on players to sign on to LIV 2.0, regardless of whether they had previously signed multi-year contracts with LIV Golf.
Spain’s Rahm was arguably the most high-profile name to join LIV when he left the PGA Tour in December 2023 for a deal worth a reported £222m ($300m).
Some players, including Brooks Koepka, have since returned to the PGA Tour, which rewrote its rules in December to allow the five-time major winner to come back, subject to certain sanctions.
Rahm did not follow suit and remained under long-term contract with LIV, but in May reached a deal with the DP World Tour – formerly the European Tour – to retain his membership and remain eligible for next year’s Ryder Cup.
In August, the former world number one won his third straight LIV season title.
He has previously said he had no regrets over joining LIV and backed organisers to make it sustainable.
Chapter 11 protection postpones a US company’s obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.
Saudi Arabia’s Public Investment Fund (PIF) is providing a bankruptcy loan of $49.6m (£36.6m) – called ‘debtor in possession’ (DIP) financing – to help fund the process.