Frank McCourt gets his money, for now
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Dodgers owner Frank McCourt can use the financing he obtained this week to pay the team’s immediate bills, attorneys for the Dodgers and Major League Baseball agreed Tuesday.
The U.S. bankruptcy court scheduled a July 20 hearing at which MLB can ask to replace McCourt’s financing with money furnished by the league.
When the Dodgers filed for bankruptcy on Monday, McCourt said he had obtained a $150-million loan to cover the team’s expenses during the proceedings and remain in control of the team for now. That loan carried an interest rate of at least 10% and a $4.5-million fee.
On Tuesday, MLB proposed its own financing, with an interest rate of 7% and no fee.
The parties agreed to postpone consideration of the MLB financing until July 20. If the MLB financing is approved, the $4.5-million fee tied to McCourt’s financing would be cut to $250,000. In the meantime, McCourt can use his financing to pay the Dodgers’ bills.
The parties also agreed to permanently delete language in McCourt’s financing agreement stipulating the auction of the Dodgers’ cable television rights by a certain date. However, McCourt’s long-term plan for recapitalizing the Dodgers still depends upon the bankruptcy court approving a rights deal over MLB objections.
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-- Bill Shaikin