McCourt's Divorce Leads the LA Dodgers to File for Bankruptcy in Delaware
LOS ANGELES (AP) - The Los Angeles Dodgers filed for bankruptcy protection in a Delaware court Monday, blaming the refusal of Major League Baseball to approve a multibillion-dollar TV deal that owner Frank McCourt was counting on to keep the troubled team afloat.
The Chapter 11 financing permits the Dodgers to use $150 million for daily operations and buys time for the team to seek a media deal, the team said in a news release. The statement read that the day to day operations of the team would not be effected. Bankruptcy protection will provide the Dodgers with a process to address its immediate financing requirements and obtain the capital necessary to ensure the baseball franchise's long-term stability, the team said.
McCourt said the Dodgers have tried for almost a year to get Selig to approve the Fox transaction. The deal would have provided him with $385 million up front and was vital to a binding settlement reached between him and his ex-wife and former Dodger CEO Jamie McCourt last week.
The McCourts have been involved in a bitter divorce and evidence of their lavish spending were detailed in court documents.
In April, MLB took the extraordinary step of assuming control of the troubled franchise. Former Texas Rangers President Tom Schieffer was appointed to monitor the team on behalf of Selig, who said he took the action because he was concerned about the team's finances and how the Dodgers are being run.
McCourt has maintained he met the criteria set forth by baseball officials in order for the TV contract to be approved and would amend the conditions if need be. The Dodgers' current TV deal with Fox expires in 2013.
The divorce settlement, now voided because of Selig's decision, called for a one-day "characterization" trial Aug. 4 to determine if title to the Dodgers is in Frank McCourt's name or if the team should be considered community property and sold. Sacks said the trial may be shelved and Superior Court Judge Scott Gordon could decide how to handle division of assets.
Gordon ruled in December that a postnuptial marital agreement that gave Frank McCourt sole ownership of the Dodgers was invalid. That cleared the way for Jamie McCourt, who served as the team's CEO and was fired by her ex-husband two years ago, to seek half the team under California's community property law.
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