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Major League Baseball could try to seize control of Dodger bankruptcy proceedings, legal expert says

June 27, 2011 |  2:57 pm

Mlbi Major League Baseball could try to seize control of the Dodgers bankruptcy proceedings and even daily management of the team by arguing that Frank McCourt has drained the company and created the shortfall, Loyola law professor Dan Schechter said.

"Frank supposedly used the Dodgers as his private piggy bank," Schechter said. "So if you borrow money against the company and you drain the proceeds for your personal use, that may be a fraudulent transfer."

If the argument succeeded, a trustee would be appointed to oversee the bankruptcy and that trustee could appoint someone to run the franchise, Schecter said.

Photos: The Dodgers and the McCourts

Any successful reorganization also would depend on the sale of broadcasting rights, and broadcasters might be wary of entering a deal the MLB didn’t want, he said.

“If you shoot the king, don’t miss,” Schecter said.  "If you think you can fly in the face of the MLB, you better be sure you are right because they have the only game in down."

He said the Dodgers’ bankruptcy is completely different from the filing by the Texas Rangers last year. “The Rangers were in and out of bankruptcy in months. It wasn’t nearly as messy or contentious as this, nor were there any indications of financial wrongdoing, and here there appear to be.”

If McCourt is unable to put together a successful plan to finance the company, “it goes to the highest bidder unless there is some really good reason to doubt the quality of that bidder.”

But Schecter said McCourt has hired extremely able lawyers, "the best that money can buy."

 “The chances are pretty good they have their ducks in a row,” the professor said.

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-- Maura Dolan

Photo: Fans gather near an entrance to Dodger Stadium. Credit: Danny Moloshok / Associated Press

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