Dodgers sale and plan to exit bankruptcy approved
WILMINGTON, Del./LOS ANGELES, April 13
WILMINGTON, Del./LOS ANGELES, April 13 (Reuters) - The Los Angeles Dodgers' sale to a group led by basketball legend Earvin "Magic" Johnson for $2.1 billion and the Major League Baseball team's plan to exit Chapter 11 this month were approved by a U.S. bankruptcy judge on Friday.
The approval was needed by midnight to allow the team to exit bankruptcy by April 30 and provide the cash for outgoing owner Frank McCourt to meet a deadline for paying his ex-wife Jamie McCourt about $130 million.
Major League Baseball had waged a last-ditch effort at the hearing to delay the plan's approval.
Tom Lauria, a lawyer for MLB, said the deal approved by the league's other 29 owners was not the sale agreement laid out in documents presented by the team. In particular, the league was concerned about the control of parking around the stadium.
"These matters are serious," said Lauria, "and they need to be resolved. And if not ... we may have problems with this deal closing."
Lauria said after the hearing that the league will have 14 days to decide whether to appeal.
The Dodgers have said Frank McCourt and certain affiliates of the buyers will form a joint venture to buy the stadium and surrounding land.
Lauria asked for a confirmation order that would allow the league more time to review documents. MLB asked the judge for the right to come back to the court and ask the judge to vacate the confirmation order if it found that the documents differed from the deal promised by the team.
"MLB continues to be interested in upsetting this transaction," said Dodgers attorney Bruce Bennett after the hearing. "I don't think there is a realistic chance it won't close."
The judge, Kevin Gross, has overseen numerous bitter disputes in the case that were eventually settled, and seemed taken aback by the league's arguments. "I'm surprised we're at this point at the confirmation stage," he said.
The league and McCourt battled for months after the team filed for bankruptcy in June. Those disputes were resolved by an agreement last year by McCourt to put the team up for sale.
The league's deal with McCourt also included an agreement to have a mediator oversee disputes relating to the sale, an arrangement that the league said set the Dodgers apart from MLB's other teams.
The league wanted the mediator's role to end with the bankruptcy, but they lost that argument on Friday.
Bennett said matters of dispute relating to the settlement and sale will go to a mediator for "many years."
The steep sales price was driven in part by the sought-after rights to broadcast future games, which will be worth billions of dollars, particularly if the new owners build a regional sports network.
News Corp's Fox is interested in extending its current broadcasting deal that expires in 2013 and has an exclusive negotiating window that expires Nov. 30. It is likely to face competition from Time Warner Cable and CBS .
Time Warner has been keen on pursuing a stake in the team to increase its chances in broadcasting negotiations, according to people familiar with the situation.
But the buyers assured Fox on Friday in court that Time Warner Cable was not directly or indirectly involved in the purchase of the team, which would be in violation of its contract.
On March 27, McCourt announced a group of buyers, led by investment banking firm Guggenheim Partners, agreed to buy the team in a record $2 billion deal.
The money from the sale will allow for creditors to be paid in full, it said.