Dodgers Win Approval for Team’s Sale and Bankruptcy Exit
The Los Angeles Dodgers, set to end court oversight of the club about 10 months after filing for bankruptcy, won permission to sell the Major League Baseball team for a record $2.15 billion.
U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, approved the Dodgers’ reorganization plan, which is built on the sale of the team to a group including former basketball player Magic Johnson, Guggenheim Partners Chief Executive Officer Mark Walter and former Atlanta Braves and Washington Nationals President Stan Kasten. Walter will be the controlling member of the group, according to court documents.
The team and MLB will now submit any disputes related to the sale to a retired federal judge who is acting as mediator. The mediator will make final decisions in time for the deal to close on April 30.
“I suspect I will be hearing some issues in the future, but hopefully they will be limited,” Gross said in court yesterday, referring to continuing disputes between the team and MLB.
Major League Baseball “has issues” with the sale, including who will own the stadium parking lots and whether a court-appointed mediator will retain the authority in the future to make final rulings related to the transaction, attorney Thomas E Lauria said in court.
Gross praised the mediator, retired federal judge Joseph Farnan. He said that without Farnan’s work, the sale and the end of bankruptcy would have taken much longer.
“Judge Farnan has gotten this case to the point where it really needed to be,” Gross said.
The remaining disputes will not threaten the sale, Dodgers attorney Bruce Bennett said in an interview after the hearing.
“I don’t think there is any realistic possibility that the transaction will not close,” Bennett, with Dewey & LeBoeuf LLP in Los Angeles, said.
Owner Frank McCourt put the Dodgers into bankruptcy in June, claiming Baseball Commissioner Bud Selig forced the team into a cash crisis by rejecting a new contract with News Corp.’s (NWSA) Fox Sports, which holds the club’s television rights through the 2013 season.
The sale is scheduled to close April 30, after opponents to the reorganization plan have a chance to decide if they want to appeal Gross’s approval. The team will then officially exit bankruptcy.
After mediation sessions with Farnan, McCourt agreed to sell the team, ending his battle with MLB in November and, in January, dropping his effort to sell the television rights separately from the team.
The Magic Johnson group won an auction for the team last month, beating competing offers from Stan Kroenke, who owns the National Football League’s St. Louis Rams and Arsenal of English soccer’s Premier League, and a group led by Steve Cohen, who runs hedge fund manager SAC Capital Advisors LP.
Fox initially opposed to the sale, seeking written assurance that competitor Time Warner Cable Inc. (TWC) wasn’t part of the group buying the Dodgers. Fox agreed to drop its objection after the team agreed to give the broadcaster written assurances that Time Warner isn’t part of the Johnson group, attorneys for both sides in court.
Gross threw out a request by McCourt’s ex-wife, Jamie McCourt, to include her $131 million divorce settlement as a claim against the team. Jamie McCourt, the team’s former chief executive officer, must seek payment from Frank McCourt, not the team, Gross ruled.
Under the divorce settlement, McCourt must pay Jamie McCourt $131 million by April 30.
While based in Brooklyn, New York, the Dodgers became the first Major League Baseball team with a black player when Jackie Robinson took the field in 1947. They started play in 1884 as the Brooklyn Atlantics, and didn’t win their first championship until 1955. Even with devoted fans that lovingly called them “Dem Bums,” they joined the Giants in moving from New York to California in 1958.
The Dodgers have won six World Series, tied for fifth-most in baseball. Five of them came in Los Angeles, where Duke Snider, Sandy Koufax, Steve Garvey, Fernando Valenzuela and Kirk Gibson led them to championships.
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