MLB: Frank McCourt would ‘personally benefit’ from bankruptcy loan
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Frank McCourt (pictured above) wants the Bankruptcy Court to approve a loan in which the Dodgers owner has ‘a substantial personal financial stake,’ attorneys for Major League Baseball wrote in a court filing late Thursday.
The league has offered its own loan to finance the Dodgers through the bankruptcy process. By approving the loan arranged by McCourt, the league argues, the Dodgers would be subject to ‘almost $15 million more in financing costs’ while the Dodgers owner ‘personally benefitted’ from the deal. The amount by which the league alleges McCourt would benefit is redacted from the filing.
‘Clearly, Mr. McCourt has not allowed these bankruptcy cases to change the practice of using the [Dodgers] as his personal piggy bank,’ the filing read.
The language immediately preceding that sentence alluded to another action by McCourt ‘at the very same time’ he was negotiating the loan in question. The language describing that action also is redacted.
The filing also blacks out the exact amount the league claims McCourt has taken ‘in direct and indirect payments to him, his family, and affiliated entities from the Dodgers.’ That amount is close to $200 million, according to a person familiar with the matter but not authorized to discuss it publicly. The league also said McCourt had failed to disclose or seek approval of several financial transactions, as required by league rules.
McCourt’s attorneys have said the Dodgers cannot be financed by the league during bankruptcy because MLB could use that leverage toward the ouster of McCourt. In response, the league said the court would retain oversight of the operation of the Dodgers.
In the filing, MLB also claimed that Commissioner Bud Selig had received an ‘extraordinary number of complaints’ from fans of the Dodgers and other clubs following the beating of Bryan Stow in the Dodger Stadium parking lot on opening day.
‘The incident highlighted the apparent deficiencies in security provided by the [Dodgers], which compromised the safety of fans and patrons,’ the filing read.
The filing also said that Selig appointed a trustee to oversee the Dodgers because of ‘among other things, the revelations of Mr. McCourt’s mismanagement of the Dodgers, the resulting liquidity crisis facing the Dodgers, the ensuing loss of public confidence in the team, and the potential harm all of the foregoing would cause.’
-- Bill Shaikin