Los Angeles Dodgers sue to keep Fox from blocking team sale

Wed Nov 16, 2011 4:42pm EST

Los Angeles Dodgers second baseman Juan Uribe warms up with his teammates before taking batting practice before the start of their American League MLB interleague baseball game at Target Field in Minneapolis, June 27, 2011. REUTERS/Eric Miller

Los Angeles Dodgers second baseman Juan Uribe warms up with his teammates before taking batting practice before the start of their American League MLB interleague baseball game at Target Field in Minneapolis, June 27, 2011.

Credit: Reuters/Eric Miller

(Reuters) - The Los Angeles Dodgers sued Fox Sports on Wednesday to stop the broadcaster of the baseball team's games from interfering with plans to auction the bankrupt franchise.

The lawsuit comes just four days after the Dodgers sought court permission to sell future media rights as a way to boost the value of the team as it heads to the auction block.

The Dodgers said in the lawsuit that Fox, a unit of News Corp, had sent a "cease and desist" letter to the Dodgers' adviser, who Fox said had solicited bidders for a media rights auction.

"The issuance of the Fox letter was intended to interfere with the sale of the Dodgers and their assets in bankruptcy," said the lawsuit, filed in Delaware's bankruptcy court.

The Dodgers are seeking an injunction against Fox Sports and unspecified damages.

Fox said in its letter that the Dodgers' adviser, Blackstone Advisory Partners LP, had violated Fox's right to an exclusive negotiating period by reaching out to potential bidders for the media rights.

"This is just the latest chapter in the current owner's ongoing scheme to avoid honoring his contractual obligations," Fox said in a statement. "The full truth of this unfortunate situation will soon become apparent to all."

Major League Baseball declined to comment. Blackstone did not immediately return calls for comment.

The Dodgers filed for bankruptcy in June after the league rejected the team's proposal to sell the rights to broadcast its games for $3 billion.

Until they reached a settlement this month, the bankruptcy pitted team owner Frank McCourt against league commissioner Bud Selig. Then two weeks ago, the league agreed to remain neutral on the media rights sale if the team were put up for auction.

A committee of unsecured creditors has asked a judge to end the Dodgers' exclusive control of its bankruptcy should the team be unable to make progress on an exit plan by February.

Losing the exclusive right to propose a bankruptcy plan would clear the way for other parties to present plans. Fox, for example, could ask the court to approve a plan that took a very different view of the media rights sale.

The Dodgers have asked for exclusive control through April 25. The exclusive period expired on October 25.

The Dodgers said in a statement on Wednesday that the media sale was the best way to maximize the value of the team and exit bankruptcy.

The Dodgers still have not said how they would run an auction that would satisfy both Selig and McCourt, who bought the Dodgers for $430 million in 2004.

One adviser who is discussing a possible bid with several interested groups said it was unclear how the process was going to move quickly.

This person, who declined to be identified, said it would be impossible to value the team until the media rights sale was completed, which could take months.

(Reporting by Tom Hals in Wilmington, Delaware; editing by Gerald E. McCormick and Steve Orlofsky)

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