The Dodgers announce they have filed for bankruptcy protection for the financial good of the team. If the court approves interim financing, owner Frank McCourt could meet Thursday’s payroll and remain in control of the Dodgers through bankruptcy proceedings.
By Bill Shaikin
June 27, 2011, 7:24 a.m.
The Dodgers filed for bankruptcy protection Monday in a move that owner Frank McCourt said would stabilize the financial future of the team. The move also could extend the battle for ownership of the Dodgers well beyond this season.
McCourt has obtained $150 million in interim financing, according to a statement issued on his behalf. If the bankruptcy court approves that financing on Tuesday, McCourt would meet Thursday’s payroll deadline and could remain in control of the club throughout the bankruptcy proceedings, with the intention of negotiating a television rights deal that would satisfy the court by paying off all creditors in full.
Under the Major League Baseball constitution, the act of filing for bankruptcy enables the commissioner to strip McCourt of ownership. However, bankruptcy court proceedings generally override MLB rules.
Manny Ramirez is the Dodgers’ largest creditor, according to the bankruptcy filing. The Dodgers owe Ramirez $21 million, followed by Andruw Jones ($11 million), Hiroki Kuroda ($4.5 million), Rafael Furcal ($3.7 million) and the Chicago White Sox ($3.5 million, for Juan Pierre).
The list of creditors includes much of the current Dodgers roster, Hall of Fame broadcaster Vin Scully ($152,778), the city of Los Angeles ($240,563 in tax debt) and two players yet to play for the Dodgers (prospects Zach Lee at $3.4 million and Alexander Santana at $499,500).
In a statement issued on McCourt’s behalf, the filing was said to have been done “in order to protect the franchise financially and provide a path that will enable the Club to consummate a media transaction and capitalize the team.”
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