For those interested in following the Dodgers’ bankruptcy saga, we have posted PDF copies of some documents from today’s hearing, and short summary of the events that transpired.
In short, the Court approved a motion of the Dodgers for “post-petition financing”. In other words, the Court approved the Dodgers request to borrow money to pay its bills, including Thursday’s payroll. The loan is for $150 million, $60 million now, and $90 million “from time to time”.
The financing was granted over the objections of MLB, not especially surprising, in view of the Court’s focus on affording the debtor (the Dodgers) an opportunity to pay their ongoing bills. The motions heard today might be termed “routine”, as were the resulting orders. A closed door hearing with the lawyers resulted in a couple of changes to the proposed order, one reducing the $4.5 million “exit fee” to the lender to $250,000 and another relating to the proposed sale of broadcasting rights. While the Dodgers’ cable rights remain a subject for the Bankruptcy Court to consider, the league asserted a major victory in ensuring those rights would not be subject to a time-sensitive auction as proposed by Frank McCourt.
The bankruptcy filing is a “Chapter 11”, a so-called “reorganization” where the debtor operates the business, subject to the restrictions and controls imposed by bankruptcy laws and the Court’s orders.
The next hearing is July 20, 2010, though news reports are quoting anonymous sources at MLB indicating the league will be seeking court orders to seize control of the team shortly. MLB’s agreements with owners provide for the league to do so in the event of a bankruptcy filing, though bankruptcy laws put that decision in the hands of the judge, so today’s hearing figures to be merely the opening salvo for the bigger battle to come.
Dodgers order authorizing post petition financing (32 pages), or view below.
The hearing in Delaware was attended by more than a few lawyers, though most were appearing merely to observe, on behalf of various creditors. The real battle was obviously between the Dodgers and MLB.
By my count, the Dodgers had seven (7) lawyers present, MLB, eight (8).
Lawyers “sign-in sheet” for June 28, 2011 hearing (or view below) Attention to detail: Do attorneys Laura Davis Jones and Tim Cairns know that their client’s name is Jamie McCourt?