* League says Dodgers attorneys are conflicted
* Attorneys risking team’s expulsion from MLB
* Owner paying teams lawyers, violating bankruptcy code
By Tom Hals
Sept 26 (Reuters) - The lawyers for the bankrupt Los Angeles Dodgers have put the interests of the owner, Frank McCourt, ahead of the baseball team they represent and they should be disqualified, according to Major League Baseball.
The disqualification request steps up the battle between the league and McCourt over ultimate control of one of the sport’s most storied franchises.
The cash-strapped Dodgers filed for bankruptcy in June after the league rejected McCourt’s planned sale of broadcast rights for $3 billion because some of the proceeds were earmarked for McCourt’s personal use.
The Dodgers’ law firms, Dewey & LeBoeuf LLP and Young Conaway Stargatt & Taylor LLP, are now pursuing the media rights sale again, this time while in bankruptcy, even though the league warned it could lead to the team being expelled from baseball.
MLB said in court papers filed Friday in U.S. Bankruptcy Court in Delaware that strategy shows that team’s attorneys are working not for the Dodgers, but McCourt.
“It is clear that debtors’ counsel either cannot distinguish between the interests of Mr. McCourt and the best interests of the debtors, or are simply ignoring the conflict and acting solely for Mr. McCourt because he ultimately controls the Dodgers’ purse strings,” the league said in court documents.
The league said a McCourt-owned entity is paying the team’s attorneys, violating a bankruptcy code requirement that the attorneys representing a bankrupt company must be disinterested.
The league commissioner, Bud Selig, and McCourt are battling over control of the franchise. The league says the MLB constitution rules the team, and it has said repeatedly it has the right to force McCourt to sell the team.
The Dodgers disagree, and argue that bankruptcy law trumps the MLB contract.
The team plans to sell the rights to broadcast the team’s games, and use the billions of dollars to pay back creditors in full. The team will likely ask the judge to overrule baseball’s objection to sale on the grounds that the league cannot enforce its rights because it is not acting in good faith.
A hearing on the proposed media rights auction and the motion to disqualify the team’s attorneys is scheduled for Oct. 12.
Bruce Bennett of Dewey & LeBoeuf’s Los Angeles office, and Robert Brady of Young Conaway’s Wilmington, Delaware office, did not immediately return a call for comment on Monday.
The case is In re: Los Angeles Dodgers LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12010. (Reporting by Tom Hals, editing by Dave Zimmerman)