Frank McCourt, Bud Selig likely to testify
DOVER, Del. -- A Delaware judge presiding over the Los Angeles Dodgers bankruptcy issued an order Friday scheduling a hearing that could determine the fate of the team and said he expects baseball Commissioner Bud Selig and Dodgers owner Frank McCourt to testify under oath.
In a sharply worded order in response to dueling motions by the league and the team, Judge Kevin Gross said he was setting aside four days for an evidentiary hearing, starting Oct. 31, so that he can decide critical issues "based upon facts rather than the harsh allegations and innuendo of antagonists."
Gross said he must decide whether the Dodgers' plan to auction off television rights to future games as the way out of bankruptcy is in the team's best interest, or whether Major League Baseball can dictate what the Dodgers can and cannot do.
"There is no middle ground for decision," he wrote.
In scheduling the hearing, the judge said he would hear requests for limited depositions at a previously scheduled Oct. 12 hearing, but that he would not hear arguments on the competing motions that day.
The Dodgers are seeking court approval of a process to auction television rights to games starting in 2014. The league has asked the court to terminate the Dodgers' exclusive rights to file a reorganization plan so that the league can file its own reorganization plan, which would force McCourt to sell the team. The league also is seeking to disqualify the Dodgers' attorneys, arguing that they have been advancing McCourt's interests rather than the best interests of the Dodgers.
The Dodgers sought bankruptcy protection in June, blaming Selig for refusing to approve a multibillion-dollar TV deal with Fox Sports that McCourt was counting on to keep the franchise afloat.
League attorneys have said McCourt is driving the team to destruction and using the Chapter 11 case to try to resolve his own personal financial problems.
Gross said an early resolution of issues in the bankruptcy case will allow the team to use the offseason to prepare for the 2012 baseball schedule.
"In addition, the court's direction for the prompt hearing will enable the court to maintain control over parties whose animus towards one another could result in unnecessary, spiraling and excessive litigiousness which would become increasingly challenging to disentangle," he wrote.
The Dodgers released a statement saying they were looking forward to the hearing, and that the plan to auction off the television rights is the best way to maximize the value of the bankruptcy estate for the benefit of all stakeholders.
The league, however, has said the plan to sell television rights without its approval is "dead on arrival" and would spell the end of the ball club. League attorneys argue that such a sale would breach the Dodgers' existing contract with Fox Sports, leaving it subject to substantial legal claims, while also providing grounds for termination from the league.
"The court seems to have signaled that their only path to victory is to prove that the commissioner acted in bad faith in regards to the Dodgers or Frank McCourt," said Tom Lauria, an attorney representing MLB.
Lauria said the league is confident that Selig has acted properly in rejecting the Fox Sports deal and refusing to approve any media rights sale that permits McCourt to use proceeds for his own personal reasons.
Attorneys for the Dodgers, claiming the team has been treated unfairly, have sought to gain information from the league about its dealings with other clubs.
But in his scheduling order, Gross said he will limit discovery in the case to the league's relationship with the Dodgers.
"The court will not turn the debtors' ills and whether the commissioner is treating debtors and Mr. McCourt unreasonably and vindictively into a sideshow of all of MLB," the judge wrote.
Copyright 2011 by The Associated Press