MLB objects to Dodgers bankruptcy financing

Question of the Day

Is it still considered bad form to talk politics during a social gathering?

View results

WILMINGTON, DEL. (AP) - Just hours after Major League Baseball objected to the bankruptcy filing by the Los Angeles Dodgers, accusing team owner Frank McCourt of siphoning off more than $100 million in club revenue and driving the Dodgers into a liquidity crisis, a Delaware judge on Tuesday granted several routine motions that will allow the team to continue operations.

Judge Kevin Gross authorized the Dodgers to continue paying vendors, utility providers and employees, and to keep up with tax and insurance obligations. The granting of such motions is routine in first-day hearings in bankruptcy court, but Gross noted that the baseball club’s case is unique in some aspects.

“I haven’t seen a wage motion quite like this one,” the judge said, referring to the team’s 44-page motion to continue paying hundreds of full-time and part-time employees, including about 250 players, most of whom are in the minor league ranks.

Gross also granted the team’s request to honor payments it is required to make under collective bargaining agreements.

“The seamless, uninterrupted operation of the team is vital,” said Richard Seltzer, an attorney for the Major League Baseball Players Association.

After granting several of the motions, Gross ordered a 30-minute recess, allowing time for discussions between attorneys for the Dodgers and MLB, which opposes the team’s request for authorization to enter into a $150 million financing arrangement.

“It’s a foregone conclusion that a loan is going to be approved,” said Dodgers attorney Bruce Bennett. “We have to decide which one and on what terms.”

Commissioner Bud Selig claims in the filing that his office can provide a loan on better terms than what a group of lenders is offering, and argues that the court should reject McCourt’s financing proposal because it compels the team to sell valuable future broadcast rights to meet current expenses and to provide money for McCourt’s personal use.

The Dodgers have blamed the bankruptcy filing on Selig’s refusal to approve a multibillion-dollar TV deal that McCourt was counting on to keep the cash-starved franchise afloat.

Thomas Lauria, an attorney representing Selig’s office, disagreed with Bennett that the league and the team were adversaries, saying the league views the Dodgers as one of its “cherished crown jewels,” and an “essential component” of the league.

Lauria did suggest, however, that the league was at loggerheads with McCourt, whom he blamed for “today’s sorry mess.”

In addition to the dispute with the league over financing, the Dodgers are facing a challenge from McCourt’s ex-wife, Jamie, who is battling in a California divorce court for half of his ownership assets.

“Jamie McCourt is a presumptive owner of 50 percent of assets,” said Laura Davis Jones, an attorney representing her.

Jones urged the judge to do only what is minimally necessary to preserve the assets of the team.

“Nothing should be done today that locks the future of this case into concrete,” she said.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments
blog comments powered by Disqus
Get Adobe Flash player