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Employees of the Los Angeles Dodgers may not receive pay as normal on Thursday, June 30. NBC Sports according to that LA Dodgers Holding Company LLC has filed Chapter 11. Players and staff paycheck is beyond manager Frank McCourt's ability to rectify at this time. Post resource - Los Angeles Dodgers file Chapter 11 bankruptcy by Newsytype.com.
Getting some time
Legal action is stopped against the LA Dodgers Holding Company with the Chapter 11 filing. This shields the crew from up to 49 creditors who are prepared to sue, as reported by paperwork filed. Major League Baseball Commissioner Bud Selig will have full control of the team now though. Legal experts know that Dodgers reorganization will most likely be the end result regardless.
Fox Sports not in McCourt's corner
Frank McCourt has been relying on a 17-year broadcasting rights offer between the LA Dodgers and Fox Sports, which according to Bloomberg is worth around $3 billion. In order to fulfill expenditures for the team, McCourt has even taken out payday loans on the offer. This also involved some personal expenses for McCourt. That may include his divorce that occurred.
The Chapter 11 and everything else shows one thing. Frank McCourt probably didn't have a financial back-up plan in his back pocket. It is not known if McCourt will get what he wants although the Wall Street Journal believes that he will ask the court to make Fox Sports pay out the Television deal money anyway. When it comes to Frank McCourt, Fox has been very hands off. That has been the case for the last few months. The LA Dodger's creditors, not Frank McCourt or the Dodgers themselves, are probably the most important part of the bankruptcy, according to legal experts.
Stance Major League Baseball is taking
As reported by NBC Sports, Selig and MLB are taking the position that Frank McCourt accepted less cash from Fox Sports than he could have received for a broadcasting deal of that length. A forced auction sale might turn out to be what occurs if the court decides the LA Dodgers were short-changed by McCourt for quick cash. MLB will look after the paycheck for the Dodgers until the matter is settlement more than likely.
The Dodgers moving forward is something McCourt is stressed about:
"The Chapter 11 process provides the path on which to position the Los Angeles Dodgers for long-term success," he said. "The process will allow us to focus on maximizing value in a manner that is transparent and driven by the best interests of the Los Angeles Dodgers and our fans."
Picking up a costly team
There is under $50,000 in liabilities with between $500 million and $1 billion in assets listed on the LA Dodgers Holding Company LLC bankruptcy filing. Bruce Bennett is a bankruptcy counselor at law firm Dewey & LeBoeuf which is based in New York. He said that all Dodger monetary obligations will be met:
"The deal with Fox demonstrates that the Dodgers have enormous value which substantially exceeds the team's current and future liabilities," said Bennett. "The media rights will, one way or another, generate enough value to facilitate reorganization."
The Fox deal meant advances for Frank McCourt in cash
Wall Street Journal