Jon Rahm is quitting LIV Golf due to "unacceptable" terms, the star's lawyer said on Wednesday, dealing a significant blow to the divisive breakaway tour as it attempts to relaunch itself after declaring bankruptcy.
Along with Bryson DeChambeau, double major winner and former world No 1 Rahm was arguably the most prominent golfer to defect from the PGA Tour and join the free-spending Saudi-backed league.
But LIV filed for bankruptcy protection last month after its deep-pocketed Middle Eastern backers pulled the plug.
The tour is trying to relaunch next year with new investors as "LIV 2.0". Retaining popular stars like Rahm was widely seen as critical to its prospects.
"Mr. Rahm has independently reviewed the proposed terms of LIV 2.0 as the parties have been referring to it, and has determined that those terms are unacceptable as to him, and he will not be participating going forward in LIV 2.0," his lawyer John Beck told a US Bankruptcy Court of New Jersey hearing on Wednesday.
Beck said that "advanced discussions for a consensual separation agreement of Mr. Rahm and LIV" are ongoing, according to a courtroom audio recording verified by AFP.
That agreement is expected to be presented before the court next month, he added.
"If the parties, for whatever reason, are unable to reach a consensual separation agreement, Mr. Rahm intends to press his objection" through legal channels, said Beck.
LIV Golf did not respond to an AFP request for a comment.
Launched in 2022, LIV Golf's emergence led to bitter divisions throughout the sport as several of golf's top names left the PGA Tour after signing big-money deals.
Saudi Arabia's Public Investment Fund (PIF) poured an estimated $5 billion into the tour, before abruptly pulling the plug earlier this year.
Documents from bankruptcy filings show that LIV owes between $500 million and $1 billion in estimated liabilities to at least 1 000 creditors, including star players.
Rahm, DeChambeau and fellow golfer Dustin Johnson hold the largest unsecured claims against the tour, totaling more than $5 million each in immediate past-due payments, per the bankruptcy filing.
Still, new lead investor BC Partners Credit has pledged an initial funding commitment of a potential $300 million to help LIV relaunch in 2027.
Tour officials have outlined a shorter schedule and reduced prize money with tournaments across five continents, in locations including Australia, South Africa, Mexico, England, Hong Kong and the US.
Representatives for Rahm did not respond to an AFP request for a comment on the 31-year-old's future plans.
Widespread reports have recently linked several LIV stars with potential returns to the US-based PGA Tour.
The PGA Tour has said that it currently has no plans to offer LIV players a pathway back.
Rahm continues to play on the DP World (European) Tour, though he announced on Tuesday that he would skip the upcoming Spanish Open to attend the birth of his fourth child.