Friday, January 20, 2012
Dodgers file reorganization plan
DOVER, Del. -- The Los Angeles Dodgers filed a proposed bankruptcy reorganization plan Friday, a little more than a week after resolving a court fight with Fox Sports that threatened plans to sell the ball club.
The Dodgers said in court documents filed in U.S. Bankruptcy Court in Wilmington, Del., that the pending sale of the team should satisfy all creditor claims in full, either through cash payments or assumption of the claims by the new team owners.
The Dodgers intend to complete a sale of the team by April 30, as called for in a settlement with Major League Baseball. The April 30 date coincides with the deadline for Dodgers owner Frank McCourt to pay $131 million to his ex-wife, Jamie, as part of their divorce settlement.
"The plan resolves fully the financial challenges confronting the Dodgers that precipitated the filing by the debtors of the Chapter 11 cases through a sale of all of the equity of the Dodgers, which will result in a change in ownership of the team," the Dodgers said in a prepared statement.
A spokesman for Major League Baseball declined to comment on Friday's court filing.
According to court documents, the Dodgers plan to disclose the terms of the team sale by early April, in advance of a bankruptcy court hearing on whether to confirm the reorganization plan.
The Dodgers are asking for a Feb. 22 hearing for approval of the statement outlining the reorganization plan and the process for creditors to vote on it.
But the only creditor who would be allowed to vote on the plan is LA Partners LLC, the parent company of LA Holdco LLC. Holdco, in turn, is the sole member of the Los Angeles Dodgers Holding Co.
According to court documents, LA Partners is a wholly owned subsidiary of The McCourt-Broderick Limited Partnership, in which McCourt owns a 90 percent interest and is the sole limited partner. The McCourt Co. is the sole general partner in TMBLP and owns the remaining 10 percent.
The Dodgers sought bankruptcy protection in June after baseball Commissioner Bud Selig rejected a new TV deal with Fox that McCourt was counting on in order to make payroll and keep the franchise solvent.
After the bankruptcy filing, attorneys for Selig successfully fought to force the Dodgers to accept bankruptcy financing from Major League Baseball, arguing at the same time that McCourt had looted more than $180 million from the team for his own use and for business reasons not related to baseball and should be forced to sell the team.
The Dodgers, meanwhile, threatened to seek court permission to enter into a new media rights deal without the approval of MLB.
But after battling for several months, the Dodgers and MLB reached an agreement in November that authorized a sale of both the team and a process to market the media rights to games starting in 2014.
Fox Sports objected to the settlement with MLB and the proposed marketing of future media rights, saying it violated Fox's rights under an existing telecast contract with the Dodgers.
The Dodgers reached a settlement with Fox earlier this month after a federal district court judge said Fox likely would win an appeal of a bankruptcy judge's ruling authorizing the marketing of the media rights.
Under the settlement, the Dodgers will abide by the terms of the existing contract with Fox, which gives Fox an exclusive 45-day period starting in October to try to negotiate a contract extension with the Dodgers. The contract also prohibits the Dodgers from talking to other potential buyers of the media rights before Nov. 30 and gives Fox a limited right of first refusal on competing offers received after that date.
Initial bids for the team are due by Monday. Among potential buyers who have expressed interest in the team are groups that include former Dodgers players Orel Hershiser and Steve Garvey, former team manager Joe Torre, former owner Peter O'Malley and former general manager Fred Claire.