The Los Angeles Dodgers appeared to have made progress toward clearing up a couple of last-minute money disputes ahead of an April 13 hearing to confirm a bankruptcy reorganization plan that provides for selling the team for $2 billion.
In court documents filed on April 6, the Dodgers sought to convince U.S. Bankruptcy Judge Kevin Gross in Wilmington, Del., to approve the plan, saying the sale would “provide more than sufficient capital to ensure the long-term financial success” of the team.
“By any measure, the Plan is a remarkable outcome for the Debtors, their estates, and all parties in interest, especially taking into account where these cases began,” wrote Dodgers attorney Donald Bowman of Young Conaway Stargatt & Taylor in Wilmington. “When the Debtors entered bankruptcy on June 27, 2011, they did not have enough cash to meet payroll that was due in three days, and they were embroiled in a bitter dispute with Major League Baseball.”
The team’s sale is scheduled to close by April 30.
The team filed its initial plan of reorganization after McCourt settled various disputes with Major League Baseball on Nov. 2. On March 27, McCourt agreed to sell the team to Guggenheim Partners, one of several members of an investor group led by former Los Angeles Lakers star Magic Johnson.
Appearing for Guggenheim on April 9 was Foley & Lardner partner Michael Small of Chicago and Ashby & Geddes’s William Bowden, who heads his firm’s bankruptcy and insolvency practice, and associate Amanda Winfree. Foley advised an ownership group that bought the Texas Rangers in 2010 for $593 million in a similar deal.
The Dodgers also responded to concerns by team owner Frank McCourt’s ex-wife, Jamie McCourt, that the plan failed to specify that she be paid $131 million to satisfy her divorce agreement. Bowman wrote that although the team was not a party to that agreement, the Dodgers would stipulate that Jamie McCourt should receive her money. “That will avoid unnecessary controversy and facilitate a smooth closing process on April 30, 2012,” Bowman wrote.
Jamie McCourt’s attorney, Laura Davis Jones, a partner at Pachulski Stang Ziehl & Jones in Wilmington, did not respond to a request for comment.
Baseball Commissioner Allan “Bud” Selig has objected to language declaring that the Dodgers owe no payments to the league for its legal costs and fees. He argued that, under the Major League Constitution, the Dodgers are liable for $7.6 million that the league spent on legal fees and costs associated with the bankruptcy. That money would go primarily to White & Case and Proskauer Rose.
In response, Bowman wrote: “The MLB Objections are being addressed with the Mediator and are anticipated to be resolved prior to the Confirmation Hearing.” Retired U.S. District Judge Joseph Farnan is serving as mediator in that dispute.
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