Wednesday, February 22, 2012
Dodgers disclosure approved
WILMINGTON, Del. -- A bankruptcy judge on Wednesday approved the disclosure statement outlining the Los Angeles Dodgers' proposed bankruptcy reorganization plan, keeping the team's plan for an April 30 sale on track.
Approval of the disclosure statement in a Chapter 11 case typically allows the process for soliciting votes from creditors to begin.
But in the Dodgers case, the only creditor 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 Dodgers owner Frank 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 voting deadline is March 16, and the judge scheduled a hearing to decide whether to confirm the plan for April 13.
The Dodgers said in a statement that they were pleased with the judge's ruling, and that it keeps the team on track to emerge from bankruptcy on April 30, as planned.
"Bidders have shown tremendous interest in the opportunity to purchase the Dodgers and related assets, and the Dodgers look forward to a very successful conclusion to their bankruptcy case," the statement read.
Attorneys for Bryan Stow, a San Francisco Giants fan nearly beaten to death outside Dodger Stadium last spring, objected to the disclosure statement, arguing in court papers that the Dodgers were trying to use the bankruptcy process to unfairly impair his rights under California state law, including his right to a jury trial and the amount of interest he would be due on his claims against the Dodgers.
"It appears that Mr. Stow's claims in these cases on account of his injuries and his resulting pending causes of action are the largest unsecured claims in these cases by a wide margin, in all likelihood exceeding all other unsecured claims in the aggregate by a large multiple," his attorneys noted.
But the judge ruled that the information contained in the disclosure statement was adequate, and that objections to the plan itself are due by March 23.
The Dodgers submitted their reorganization plan last month after resolving a court fight with Fox Sports that threatened plans to sell the ball club.
The Dodgers said a 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 the sale by April 30, as called for in a settlement with Major League Baseball. The April 30 date coincides with the deadline for McCourt to pay $131 million to his ex-wife, Jamie, as part of their divorce settlement.
The Dodgers have said they will disclose the terms of the team sale by early April, in advance of the hearing on whether to confirm the reorganization plan.
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. They also argued 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.
After threatening to seek court permission to enter into a new media rights deal without the approval of MLB, the Dodgers reached an agreement with the league that authorized a sale of both the team and a process to market the media rights to games starting in 2014.
But Fox Sports then 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 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.