Attorneys get testy in sparring at Dodgers’ bankruptcy hearing
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On the surface, the question for U.S. Bankruptcy Judge Kevin Gross on Wednesday appeared fairly straightforward. As the Dodgers ask to sell their television rights to finance their exit from bankruptcy, do they have to reveal their template for a television contract?
Not yet, attorneys for the Dodgers argued. Right away, attorneys for Major League Baseball argued.
Gross ruled for the Dodgers, but not before a lengthy argument that hinted at the bitter fight awaiting Commissioner Bud Selig and Dodgers owner Frank McCourt when both men testify in Gross’ courtroom. That testimony will come during a four-day hearing critical to McCourt’s hope of retaining the Dodgers. The hearing is set to start Oct. 31.
Sidney Levinson, an attorney representing the Dodgers, asked why MLB was so anxious to get a copy of the broadcast contract template when Selig already has said he would reject any television deal under which McCourt would remain the Dodgers’ owner.
Glenn Kurtz, an attorney representing MLB, said Selig premised his decision in part because such a sale would violate league rules and could subject the Dodgers to what Fox Sports has called ‘massive’ damages. Kurtz also asked how the Dodgers could ask the court for permission to sell their television rights if they couldn’t say exactly how they wanted the sale to proceed.
Levinson said the Dodgers first wanted to seek a court ruling that they need not honor provisions in the current television contract that grant Fox rights of first negotiation and first refusal. At that, Fox attorney Paul Laurin jumped in and said the Dodgers were ‘holding ... Fox’s rights as hostage’ in McCourt’s fight with Selig.
Laurin called the Dodgers’ motion to sell television rights a ‘proxy’ in the fight and said McCourt versus Selig should be decided first. Bruce Bennett, the Dodgers’ lead bankruptcy attorney, challenged the motives of MLB and Fox.
‘I am struck by how urgently everyone else wants to put off consideration of the media rights motion,’ Bennett said. ‘Perhaps that is an effort to chill the market.’
Attorneys for MLB and the Dodgers also sparred over control of a locked file cabinet in the Dodgers’ offices. The cabinet was used by Tom Schieffer, the trustee appointed by Selig in April to oversee the Dodgers.
In June, when the Dodgers filed for bankruptcy, they kicked out Schieffer. They allege Selig installed Schieffer in violation of MLB rules that require an investigation to precede any such appointment; the league alleges the Dodgers violated MLB rules by kicking him out.
Gross ruled the file cabinet was ‘in control of the commissioner.’
Kurtz also said that McCourt had refused to turn over documents from ‘governmental investigations relating to him.’ (Selig has said the IRS is investigating McCourt). Bennett said McCourt’s personal attorneys had received no notice of the request. Thomas Lauria, the lead bankruptcy attorney for MLB, said no one had officially appeared on McCourt’s personal behalf in the case.
At that, Bennett raised his voice, reminding Lauria that he had sat across from a personal attorney for McCourt at a mediation.
‘There’s no confusion here,’ Bennett said. ‘This is grandstanding.’
Gross told the attorneys to settle the issue among themselves. He also directed the attorneys to resolve among themselves the legal definition of ‘McCourt’ -- that is, does a demand for documents related to McCourt mean him personally, or all of his entities?
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-- Bill Shaikin