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The Dodgers and MLB are in court today

Jul 20, 2011, 11:00 AM EDT

Combination of file photos of MLB commissioner Bud Selig and Los Angeles Dodgers owner Frank McCourt

As I type this, a big hearing is going down in the Dodgers’ bankruptcy case. It’s the one in which — or after which — it will be decided who gets to bankroll the Dodgers’ operations during the pendency of the case.  Frank McCourt and the $150 million loan he has obtained or Major League Baseball and the $150 million — and possibly more in the future — it has offered to extend to the Dodgers.

As we’ve noted several times, on purely financial terms MLB’s financing is better. Lower interest and no up-front fees like that McCourt would have to pay for his proposed financing. And that matters, because the more money lost to such costs, the less available to creditors of the bankrupt Dodgers (and the interest of the creditors is the primary interest being served in bankruptcy).

Over the past few weeks McCourt has been trying to compensate for these differences by arguing that MLB’s financing is part of a plot by Bud Selig — who he called “the devil” in a filing earlier this week — to shove McCourt aside as the team’s owner. Meanwhile, the creditors and the trustee representing them have asked the judge not to approve McCourt’s financing. It’s been a pretty ugly little battle. (UPDATE: right after I wrote this, the creditors withdrew their objections, noting that McCourt’s financier has lowered the interest rate a point).

But it likely won’t be resolved by a simple decision from the judge, approving one loan and rejecting the other.  As Bill Shaikin notes in a very useful primer of today’s hearing, the judge could ask for modifications to either side or go in a totally different direction if he wants.

What is clear, however, is that if one side’s financing is clearly favored, that side will have a much greater hand in steering the future course of the Los Angeles Dodgers.

  1. qcubed3 - Jul 20, 2011 at 11:21 AM

    If only the Bankruptcy Court’s equitable powers extended to putting a boot firmly in McCourt’s keister . . .

  2. Old Gator - Jul 20, 2011 at 11:41 AM

    McCourt’s calling Bud Light “the devil” is like an outtake from Little Nicky. Even so, once the judge rules in favor of MLB, though, I can see Bud grinning his Jack Skellington grin, leaning forward on his pearl-inlaid maple bat handle, pointing his long-nailed index finger at McCourt and rasping under his breath, “only the ass is immortal, Frank….and yours…belongs…to me.”

    Having said that, though, I have to admit that Clueless Frank’s designation of the Budster pales in comparison with Hugo Chavez’ “whiff of sulfur” comments at the UN with reference to Nolan Ryan’s mass murdering ole’ buddy. But what can you do? Frank dresses better, but Hugo is the born showman.

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