Frank McCourt got what he wanted Tuesday during a contentious hearing in bankruptcy court over the future of the Los Angeles Dodgers.
A judge authorized the Dodgers to enter into a $150 million bankruptcy financing arrangement with a group of New York lenders. Attorneys for Major League Baseball and the team agreed the Dodgers could proceed with their proposed financing on an interim basis, pending a July 20 hearing to consider an alternate proposal from Major League Baseball.
Bankruptcy Filing | MLB Objection to Dodgers Financing
The decision means McCourt can make the team's June 30 payroll and avoid the possibility of Major League Baseball seizing control of the Dodgers later this week.
The hearing Tuesday was part of proceedings that began Monday when the team filed for bankruptcy protection. The agreement includes reducing a proposed exit fee for the lending group from $4.5 million to $250,000. It also removes certain deadlines regarding the sale of broadcast rights.
At the start of Tuesday's hearing, Major League Baseball submitted strongly worded documents stating its objection the McCourt's interim financing plan. The documents claim McCourt "siphoned off well over $100 million" of club revenues and that he is "obviously unable to properly distinguish between his personal interests and those of the club."
"Mr. McCourt spent the last seven years monetizing the various assets of the Los Angeles Dodgers by creating a complex network of corporate entities through which he leveraged the club and its related assets," according to MLB's filing.
After the Dodgers filed for Chapter 11 bankruptcy Monday, McCourt said he had arranged for $150 million in debtor-in-possession financing through a New York investment firm.
Commissioner Bud Selig said in Tuesday's filing that his office can provide better terms. MLB outlined those terms, which included a better interest rate, in Tuesday's filing.
Baseball's constitution allows Selig to take control of a team that seeks Chapter 11 protection. A person familiar with the filing, who spoke to The Associated Press on condition of anonymity, said MLB planned to wait to see what happens in Tuesday's hearing before deciding which way to go.
Monday's bankruptcy filing was McCourt's latest move in his chess match with Major League Baseball. The Dodgers' owner said he was forced to file for bankruptcy protection because Commissioner Bud Selig last week rejected a proposed media-rights deal.
McCourt said the TV deal would provide long-term financial stability for the team. Selig said the proposal was "structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt."
