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Los Angeles Dodgers owner Frank McCourt and Major League Baseball are gearing up for their big court fight later this month, with each side accusing the other of looking out for its own interests and, as a consequence, placing the baseball team and fans at risk. Major League Baseball, which opposes McCourt’s plan to reorganize the Dodgers through Chapter 11 by auctioning off its broadcast rights, accused the team’s owner of siphoning nearly $190 million to pay his personal debts and support his “lavish lifestyle,” including eight houses. “The Dodgers are in bankruptcy because Mr. McCourt has taken almost $190 million out of the Club and has completely alienated the Dodgers’ fan base,” wrote one of the league’s attorneys, Jeffrey Schlerf, a partner at Fox Rothschild in Wilmington, Del. “Mr. McCourt has barely any money and his only source of income is the Dodgers.” McCourt, in turn, has accused Major League Baseball of shoving him out of the game by placing a monitor over the team and demanding to sell the Dodgers outright. “Rather, the Commissioner once again seeks to use his contractual consent rights as a litigation tactic, a sword of Damocles to hang over the Debtors’ heads in an effort to prevent them from successfully reorganizing,” wrote Ryan Bartley, an associate at Wilmington-based Young Conaway Stargatt & Taylor, which represents the Dodgers. “The Commissioner’s strategy amounts to using a sledgehammer to crack a nut.” The competing plans were scheduled to be weighed during a four-day evidentiary hearing that starts on Oct. 31 in U.S. Bankruptcy Court in Delaware. The Dodgers filed for bankruptcy protection on June 27. Schlerf and Robert Brady, a partner at Young Conaway, did not return a call for comment. In other developments, a move to establish a committee of Dodgers season ticket holders was resolved on Oct. 24 when two potential members, including a trust and estates lawyer at Jeffer, Mangels, Butler & Mitchell, agreed to sit as representatives on the already established committee of unsecured creditors. Major League Baseball has asked U.S. Bankruptcy Judge Kevin Gross to withdraw McCourt’s exclusive right to reorganize the team so that the Dodgers can be sold. In an Oct. 24 court document supporting that plan, Schlerf wrote that McCourt has taken $61.6 million from the Dodgers to pay his personal debts, plus $73 million from the team’s parking revenues and another $55 million directly from the Dodgers. He estimated that McCourt’s personal debts totalled more than $160 million, including $130 million owed to his ex-wife. The dollar figures were redacted from the arguments, but not from the motion’s table of contents. “Indeed, Mr. McCourt’s liquidity crisis likely has substantially worsened, as it has been widely reported that he now owes $130 million to Jamie McCourt, pursuant to a divorce settlement,” Schlerf wrote, citing reports that she has agreed to abandon her claim to half-ownership in the Dodgers in exchange for that amount. “Mr. McCourt cannot continue taking money out of the Dodgers to satisfy his personal debts.” Major League Baseball also attacked McCourt’s upkeep of Dodger Stadium. Schlerf wrote that McCourt has failed to maintain the facility and removed uniformed police officers in advance of the 2011 season. The league alleged additional security deficiencies, including inadequate lighting in the parking lots, lack of experienced security staff, unauthorized access to the stadium and an absence of safety signs. On the season’s opening day, following a game against the San Francisco Giants, Dodgers fan Brian Stow was beaten in the Dodgers parking lot, sustaining brain damage. Stow’s family members, represented by Tom Girardi of Girardi Keese, have filed a lawsuit against the Dodgers. Stow’s parents, Elizabeth and David Stow, are members of the unsecured creditors’ committee in the Dodgers bankruptcy. Major League Baseball isn’t alone in its opposition to the Dodgers reorganization plan. Fox Sports Net West 2 LLC, which does business as Prime Ticket cable channel in parts of California, Nevada and Hawaii, said that the plan would breach its broadcast rights. Fox Sports has an agreement to broadcast Dodgers games through the 2013 season. In an Oct. 24 court document, Fox Sports attorney Robert Dehney of Morris, Nichols, Arsht & Tunnell in Wilmington argued that the plan would result in “massive damages claim that would threaten both the Debtors’ estates and the ultimate distribution to creditors.” Dehney did not return a call for comment. Fox Sports, in an attempt to halt the reorganization plan, filed a complaint for declaratory judgment against the Dodgers on Sept. 27. Donna Harris of Pinckney, Harris & Weidinger in Wilmington, representing the unsecured creditors’ committee, attacked the plan as containing “significant legal and practical hurdles that make such a path difficult and costly, with no certainty of success,” according to an Oct. 24 filing. She asked that Gross defer any sale of the team for 30 days in the hope that the parties could reach an amicable agreement. Harris did not return a call for comment. Bartley, McCourt’s attorney, defended the plan in an Oct. 24 filing. He said Fox’s contractual rights have to “take a back seat” to the plan and that Fox, as a potential bidder, would suffer “minimal, if any, damages as a result.” Bartley accused Major League Baseball of appointing a monitor for the team without conducting a full investigation into Dodgers finances. Additionally, he accused the league of “fabricating” security lapses. “That is, by far, the most unforgiveable action taken by the Commissioner during this entire saga, and has caused enormous and irreparable harm to the Dodgers, Mr. McCourt and the game of baseball,” Bartley wrote, insisting that the Dodgers had brought in sufficient security personnel. “In short, the Dodgers were clearly on top of the situation.” In a separate move, Robbin Itkin, a lawyer representing an ad hoc committee of season ticket holders, reached an agreement on representation of 17,000 season ticket holders. “The season ticket holders need a voice in these cases and they need it now,” said Itkin, a partner in the Los Angeles office of Steptoe & Johnson, in an Oct. 25 prepared statement. “Our concern is that there would have been protracted litigation over the appointment of an official season ticket holders committee while significant matters are being decided in the bankruptcy cases that will determine the fate of the Dodgers franchise.” Gross on Oct. 25 changed the list of unsecured creditors on the committee to include season ticket holders Jeffrey Berkowitz, a partner in the Los Angeles office of Jeffer Mangels, and Susan Simons, a talent agent at David Shapira & Associates in Beverly Hills, Calif. Berkowitz specializes in trusts, estates and tax law, and represents high net worth individuals. Contact Amanda Bronstad at [email protected].

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