Frank McCourt lawyer: Dodgers satisfied with ruling
The Dodgers can obtain an "economically favorable" loan from Major League Baseball that fits with the "objective of maximizing the value" of the team, an attorney for Dodgers owner Frank McCourt said Friday.
After U.S. Bankruptcy Judge Kevin Gross denied McCourt the chance to use a loan he arranged to fund the Dodgers during bankruptcy and ordered him to accept a loan from the league, McCourt attorney Bruce Bennett issued a statement that noted the league would not be allowed to control the Dodgers by virtue of lending them money.
Bennett's full statement follows:
Today's Court ruling places the Dodgers in a position to achieve a debtor-in-possession financing from Major League Baseball, under the Court's control, that is both economically favorable and consistent with the Dodgers' objective of maximizing the value of the estate in the Chapter 11 process.
As made clear in the Order, the Court is confident that Baseball will propose to Debtors a short form credit agreement that is genuinely unsecured in nature and contains minimal -– if any -– representations, covenants and warranties, no releases for prepetition actions and no default triggers for violations of Baseball’s rules and regulations. The Baseball Loan must be independent of and uncoupled from Baseball’s oversight and governance of the Dodgers under the Major League Baseball Constitution. The Court, if necessary and as always, will provide ready access to Debtors in the hopefully unlikely event that Baseball strays from its obligations to act in good faith as Debtors' lenders.
The Debtors will propose, and, to the extent authorized by the Court, implement procedures that are designed to promote a competitive sale process of exclusive cable television rights, while at the same time giving due consideration to the Fox Telecast Agreement. The Dodgers expect that a sale or license of exclusive cable television rights will fully resolve all of the Dodgers' financial challenges as well as generate value for holders of the equity interests in the Debtors.
From the Dodgers' perspective, a short form unsecured credit agreement with MLB, when combined with other sources of revenues, should provide the Dodgers with ample liquidity to meet team payroll and other expenses, as the Dodgers proceed forward with their business plan, with the objective of emerging from the Chapter 11 process before the end of 2011.
Photo: Frank McCourt. Credit: Robert Gauthier / Los Angeles Times.