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Bill Shaikin, LATimes: Bankruptcy judge rules against Frank McCourt

Bankruptcy judge rules against Frank McCourt
by Bill Shaikin, September 30, 2011

photo: Dodgers owner Frank McCourt is not only battling Major League Baseball in bankruptcy court but is also facing a lawsuit from Fox Sports, which alleges the team has breached its current television contract in pursuit of a new one. (Robert Gauthier / Los Angeles Times / June 17, 2011)

Dodgers owner will not be allowed to put Bud Selig or other owners on trial. Four-day hearing to decide key issues in bankruptcy case will begin Oct. 31, earlier than the Dodgers wanted

Frank McCourt could know by mid-November whether he can retain ownership of the Dodgers, according to a schedule set Friday by the U.S. Bankruptcy Court.

Judge Kevin Gross set a four-day hearing to decide the key issues in the case and said he expected McCourt and Commissioner Bud Selig “to testify in person.”

Gross struck two significant blows against McCourt by ruling that the hearing would start Oct. 31 and that the Dodgers would not be allowed to put Selig or other owners on trial.


The Dodgers had asked that a critical hearing be delayed until at least December so that evidence could be gathered from other teams in support of McCourt’s claims that Selig has discriminated against the Dodgers.

“This court will not turn the [Dodgers’] ills and whether the commissioner is treating [the Dodgers] and Mr. McCourt unreasonably and vindictively into a sideshow of all of MLB,” Gross wrote.

With the Dodgers asking Gross to let them sell their television rights to finance an exit from bankruptcy, and with Major League Baseball asking Gross to order the team sold, the judge said he intended “a prompt disposition of the key issues” so that Dodgers management could “utilize the approaching off season to prepare for the 2012 season.”

Those issues, he wrote, would revolve around whether the proposed television rights sale is in the best interest of the team and the league, whether the Dodgers have violated MLB rules, whether McCourt has mismanaged the Dodgers, and whether Selig has acted in bad faith toward McCourt and/or the Dodgers.

“That’s always been a concern of leagues with these bankruptcies — that they have a bankruptcy judge deciding what is ‘good faith,’ ” said Thomas Salerno, the lead attorney for the NHL‘s Phoenix Coyotes during that team’s bankruptcy. “Sports leagues are not used to having that kind of oversight.”

However, Gross ruled that he would not permit the Dodgers to obtain and potentially reveal publicly the financial records of any other club. McCourt’s attorneys had hoped that information would confirm the owner’s long-stated contention that Selig has treated him differently than other financially troubled clubs — the New York Mets and Florida Marlins, for instance — as a pretext toward pushing the Dodgers toward a sale.

“This hearing is not a referendum on the commissioner or other baseball teams,” Gross wrote. “The court will not permit [the Dodgers] to take discovery into or of other baseball clubs. These cases are about the Dodgers.”

Dodgers spokesman Robert Siegfried said the team had no comment on that decision.

“It is a loss that they’re not going to take discovery,” Salerno said. “It’s not the end of the game.”

According to Salerno, Gross’ order refocuses the case on McCourt’s essential reason for taking the Dodgers into bankruptcy — to get the television contract that Selig would not approve. Such a contract has been opposed by MLB, Fox Sports and Jamie McCourt — Frank McCourt’s ex-wife, who claims half-ownership of the Dodgers.

Salerno said Frank McCourt and his attorneys could try to introduce evidence about other teams in two ways: one, with cross-examination of Selig; two, with an expert witness who could discuss publicly available information — for example, a sports business analyst who could discuss the Marlins’ leaked financial documents.

In a court filing Friday, the Dodgers listed their “bankruptcy-related expenses” for the first three months of the case at $5.7 million.

bill.shaikin@latimes.com twitter.com/BillShaikin

 

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