Court Approves Dodgers’ Bankruptcy Loan

by San Antonio Attorney

The Los Angeles Dodgers received a court’s endorsement to loan $60 million for payroll on Tuesday, though the team consumed its day one in bankruptcy dealing with Major League Baseball.

The money will be used to pay for salary, which includes its players’ pay, as it tries to work out its long-term expenses with the present demands of the Major League Baseball and the nasty divorce of Frank McCourt, the team owner.

Dodgers is the third team that filed for bankruptcy but compared to the Texas Rangers and Chicago Cubs, the baseball team is not in good terms with the league.

The bankruptcy was unexpected by McCourt’s ex-wife and the league. Jamie, the former wife, seeks to get one half of her former husband’s share in the team.

Dodgers will appear again in the bankruptcy court on July 20 to get clearance for another loan which is as much as $90 million.

The Major League Baseball is being blamed by the team for the bankruptcy because it rejected a TV offer that could have provided the much needed funds for huge amount of money in debt and delayed payment is due by the end of the week.

According to the league’s attorney, McCourt had allegedly taken away more than $100 million of income and caused delay of payroll.

The league disapproved Dodger’s proposal of a $3 billion TV contract for 17 years with Fox Broadcasting Co. The league believes that the plan does not serve the best interests of the game, the team, and fans.

According to court papers, the team intends to make another attempt to sell off the TV rights in bankruptcy.

The lawyers of both parties spent about one and a half hour discussing the issues over the $60 million bank loan. JPMorgan Chase & Co has agreed to give approximately $150 million.

Lenders usually use the loans to get control over companies that are bankrupt, and also the league agreed to give its own loan for a reduced interest rate.

Dodger’s lawyers said that the financial problems of the team are only temporary. The team needs to fulfill a payroll within the week, in addition to a $10.5 million delayed compensation payment. An $18 million amount of funds must also be set aside in compliance with a collective bargaining agreement with the union of baseball players.

Compared with the majority of bankrupt companies, Dodgers’ assets are higher than its financial obligations. However, the McCourts’ divorce messes with the bankruptcy, so does the team’s bitter relationships with the league.

There is no minimum amount of debt required to file for bankruptcy. Dodgers was allowed to file for bankruptcy even if it had more assets than debts. A San Antonio bankruptcy can help debtors determine if they are eligible for bankruptcy.  Contact a San Antonio Attorney for additional info.  

 

 

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