MLB move ‘gutsy’ but not sure winner, bankruptcy attorney says
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Major League Baseball moved decisively on Friday toward an end game with Dodgers owner Frank McCourt, asking a federal bankruptcy judge to order the team sold.
‘I think it’s a gutsy move,’ said Thomas Salerno, the lead attorney for the NHL’s Phoenix Coyotes during that team’s bankruptcy. ‘They have drawn a line in the sand.’
The core issue in the Coyotes’ bankruptcy is the same as in the Dodgers’ case: Would a Bankruptcy Court override league rules?
The Coyotes asked a judge to approve a sale to a bidder who wanted to move the team from Arizona to Canada. The NHL asked the judge to deny the sale, citing its interest in keeping the team in Arizona and ultimately its power over where its teams play.
The judge sided with the NHL, and with the league agreements to which the Coyotes had endorsed.
‘At the end of the day, the judge said, ‘You have to live by those agreements,’ ' Salerno said.
The Dodgers have asked a judge to authorize a sale of the team’s television rights. The league said it would reject any sale because some of the revenue would necessarily be diverted from the team to settle McCourt’s personal business, including his divorce. ‘It’s a question of whether they exercise that rejection in good faith,’ Salerno said.
By announcing its rejection of any deal before a sale could take place, and by signaling its veto of a plan that McCourt could use to pay all the Dodgers’ creditors in full, Salerno said, the league could be seen as not acting in good faith.
‘I think MLB runs a risk that the judge says that’s not reasonable,’ Salerno said.
Since a settlement in the case is highly unlikely, Judge Kevin Gross could issue a ruling that stands as precedent for other disputes between owners and leagues.
‘This case is clearly going to make law,’ Salerno said. ‘The league is going all in.’
-- Bill Shaikin