Tuesday, May 10, 2011
MLB "Looking Hard" At Bankruptcy? That's The Plan!
The embattled owner would almost certainly face opposition in bankruptcy court from the league, which could use a "voluntary termination" clause as empowered by the MLB constitution to revoke a franchise upon a bankruptcy filing.It has always been my position that the league (okay, in this case, "league" = "MLB") is going to force the Dodgers through bankruptcy proceedings by preventing the Fox money from rescuing Frank. (Such a rescue that would be temporary at best even if it proceeded — he and Jamie can spend a lot, and faster than the Dodgers can earn the revenue to support it.) The trigger will be unmet player salaries, the whole colossal edifice with all its myriad operating entities will get decapitated and dismembered, and Frank will be on a flight to Boston, or in irons to Leavenworth. I am not worried about bankruptcy — I embrace it. The one real hazard, though, is this:
Also, Jamie McCourt would argue that ex-husband Frank has no right to take the team into bankruptcy without her approval, since she claims half-ownership of the team, according to a person familiar with her thinking but not authorized to discuss it publicly.
"If I were McCourt, I'd take a shot at getting the court to approve the [Fox TV] contract," said Rob Kampfner, another attorney at White and Case.I have to think the banks aren't too happy to see the internal machinations of the McCourt companies, though they might be better aware of them than we know, given the sums involved. Still, I'm optimistic that McCourt will have to kneel before MLB under the "best interests of baseball" clause, and this coming bankruptcy is prelude to a forced sale that includes all assets of the Dodgers.
However, the large banks that are the Dodgers' primary creditors might not authorize whatever reorganization plan McCourt might put forth, Kampfner said, in the interest of preserving business opportunities with other teams and with the league.
"If the creditors were completely supportive of Mr. McCourt, he would be in a pretty strong position," Kampfner said. "But they're probably inclined to see their portfolio in a much larger sense than people that sell pencils to the Dodgers."