MLB slams McCourt in bankruptcy court filing
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Major League Baseball proposed a bankruptcy financing plan for the Dodgers on Tuesday, asking a Delaware court to reject a plan offered Monday by Frank McCourt and mincing no words in blaming the Dodgers’ owner for the team’s current financial predicament.
‘In pursuing his own financial interests at the expense of the club, overleveraging it and draining millions of dollars for capital investment and operations, Mr. McCourt has placed the (Dodgers) in their current, incredible position of not being able to make payroll less than halfway through the regular season,’ the MLB filing read.
On Monday, as the Dodgers filed for bankruptcy, McCourt said he had secured interim financing--a $150 million loan that would enable him to maintain control of the team while the bankruptcy court held an auction for the team’s cable television rights. The loan came at a stiff price--at least 10% interest, plus a $4.5-million fee.
On Tuesday, MLB offered to finance the Dodgers’ operations through bankruptcy proceedings at 7% interest, with no fees, a proposal the league argues is in the best interest of the creditors and the team. The bankruptcy court could decide Tuesday whether to take the financing offered by McCourt or MLB.
In a statement announcing the Dodgers’ bankruptcy, McCourt said Commissioner Bud Selig had forced the filing by rejecting a television contract that would have restored the team’s financial health. In the first words of Tuesday’s filing, the MLB lawyers shot back.
‘Having siphoned off well over $100 million of club revenues and obviously unable to distinguish between his personal interests and those of the club, Frank McCourt has driven the Dodgers into a liquidity crisis so severe that, absent extraordinary measures, the club would be unable to make its payroll,’ the filing read. ‘Mr. McCourt attempted to use that looming disaster to leverage (MLB) into approving the sale of the club’s broadcast rights to pay current expenses and to permit millions more to be misappropriated for personal use.’
In rejecting the proposed television contract, Selig noted that almost half the upfront payments would have been used for personal purposes, including payments to McCourt, his ex-wife Jamie and their lawyers.
The MLB filing asks the court to reject McCourt’s bid to save his ownership by ‘threatening the immediate demise of one of baseball’s great teams.’
The filing notes that McCourt’s bankruptcy violated MLB rules and asks the court to consider whether McCourt should retain ownership during the proceedings, whether Dodgers trustee Tom Schieffer should remain in his position and whether the case was properly filed.
-- Bill Shaikin