* Team says MLB loan grants league too much control
* League presses case for its cheaper financing
* Ruling may come as soon as Wednesday
By Tom Hals
WILMINGTON, Del., July 20 (Reuters) - The Los Angeles Dodgers fought on Wednesday to keep control of their finances while in bankruptcy, arguing Major League Baseball's offer to provide a $150 million loan was a "deal with the devil."
The Dodgers want to borrow the money from a hedge fund and told a Delaware Bankruptcy Court that the league wants to use its cheaper loan as a way to strip the team from owner Frank McCourt.
The league's proposal would give MLB "absurd" rights to reject deals by the team, even if the transaction led to the full payment of the loan, Dodgers' lawyer Bruce Bennett said at the start of the hearing.
"It's inconceivable I could agree to this," he said.
The Dodgers filed for bankruptcy on June 27 in a dramatic bid to prevent the league from seizing the team. Days earlier the league had rejected a $3 billion television deal that would have put it on solid financial footing.
The case is a tug-of-war between which laws to apply -- the rules of MLB or bankruptcy. In addition, Dodgers' owner McCourt is waging a simultaneous battle for ownership of the team in divorce court with ex-wife Jamie.
The team has suffered a drop in attendance and needs to borrow the money to pay players and staff until it can strike a cable TV deal that would provide needed cash. It has proposed borrowing the money from Highbridge Capital Management, a hedge fund unit of JPMorgan Chase & Co (JPM.N).
MLB has offered up its own proposed loan, and during hearing the league's lawyer offered to delete or rewrite portions of its credit agreement that the team opposed.
Judge Kevin Gross characterized the dispute with equine metaphors. To him, the league saw the team as looking a gift horse in the mouth, and the Dodgers viewed the league loan as a Trojan horse tactic to seize control.
Gross may rule Wednesday evening, when the hearing is expected to finish.
The MLB would not retreat from one central point -- that the team must abide by all league rules which McCourt agreed to when he bought the team in 2004.
"The Dodgers don't get four strikes where opponents get three," said league lawyer Tom Lauria.
Lauria emphasized that decisions over TV rights or other large transactions required approval of the league's commissioner, Bud Selig.
The Dodgers, he argued, owe their value and very existence to their contract with MLB and bankruptcy requires them to accept or reject that contract, but not rewrite it.
Bennett countered that the league is looking to shred the rules of bankruptcy and "hobble" the power of the judge.
While bankrupt companies generally pick from competing financing loans in Chapter 11, it is almost unheard of for a company to ask a judge to reject a proposal that offers better economic terms.
The Highbridge loan proposed an interest rate of 9 percent, which was lowered from 10 percent during the hearing, while MLB's loan was set at 7 percent.
The league argued that its loan would save the team as much as $14 million. The team said the league did not account for the cost of potential disputes that will likely arise from being forced a loan from an adversary.
The team will soon present its plans to auction its cable TV rights, which Dodgers attorney Bennett said he expected would prompt resistance from the league.
Bennett also said the team might sue the league over its refusal to allow the Dodgers to participate in league-wide revenues in the months leading up to the bankruptcy.
The bankruptcy case is In re: Los Angeles Dodgers LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12010. (Reporting by Tom Hals; Editing by Ted Kerr)