Monday, May 09, 2011

McCourt Considering BK Broiler Option

One day, he's adamantly underlining his financial stability (if only MLB would authorize the Fox deal). Now, Frank McCourt might be considering bankruptcy as a way to both achieve short-term liquidity AND keep MLB from gaining back ownership of the Dodgers:

Major League Baseball is preparing for the possibility that Frank McCourt might take the Dodgers into bankruptcy court before the league could strip him of the team.

Bankruptcy could provide McCourt with the authority and funding to remain in control of the Dodgers, at least in the short term, experts said.

The league is "looking hard" at that option, said a personal familiar with the matter but not authorized to comment publicly because of the potential for litigation.

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.

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. [...]

Alan Gover, an attorney with White and Case, the firm that represented the incoming owners of the Texas Rangers through that club's bankruptcy process last year, said, "Behind any bankruptcy filing by Mr. McCourt would be a strategy to maintain control of the club."

Bankruptcy courts need not yield to MLB rules. One high-ranking major league executive, speaking on condition of anonymity because of the potential for litigation, expressed surprise McCourt did not file for protection as soon as Selig announced his intervention.

McCourt's argument to a bankruptcy judge would be the same one he has made to MLB executives and in media interviews: The Dodgers' financial problems would be resolved with the approval of a long-term broadcast contract with Fox.

That contract has been with Selig for five weeks, even with the Dodgers in danger of missing payroll. If McCourt were able to convince the bankruptcy judge that he could repay his creditors if the Fox contract were approved, the judge could grant approval over Selig's objections.

"If I were McCourt, I'd take a shot at getting the court to approve the contract," said Rob Kampfner, another attorney at White and Case.

Just how desperate is Frank McCourt, with his back up against a May 31 wall? Guess we'll find out. Stay tuned.


Nostradamus said...

Well, that certainly sounds like fun!

Jason said...

I guess that was Frank, and not Bob Nutting, scratching furiously on the lottery tickets at yesterday's game.