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Monday, October 17, 2011

Frank And Jamie McCourt Reportedly Reach Settlement

For $130M, Jamie agrees to drop all claims to the Dodgers. This is really terrible news if true, because it means the divorce no longer looms over his head as a compelling reason to sell the team. Go, team bankruptcy!

Last week, Bill Shaikin wrote that Frank could be utterly ruined if MLB forced a Dodgers sale, mainly thanks to the debtor-in-possession financing lately acquired.

Update: Bill Shaikin again is on top of it, asking a question I saw posted on Facebook earlier today, namely, how will Frank pay Jamie if he's completely without cash? He has a deadline to achieve the $130M:

If the court orders the Dodgers sold, Jamie would get the first $130 million of net proceeds. The debt load and tax liability in such a sale could be so high that the net proceeds do not exceed $130 million. That could leave Frank with nothing from the sale.
Best Case Scenarios Dep't ...

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This is horrible news for Dodger fans, with one glimmer of hope: Frank still might have to sell the team in order to pay Jamie's settlement. Franks isn't exactly flush with cash, although it's worth repeating that it is the Dodgers, not Frank, who are in bankruptcy. And Frank's debt to Jamie is not a team debt, so theoretically he cannot use money from any auction of TV rights (which funds must be used to pay the creditors of the bankrupt team) to pay his personal obligations.

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