July 19, 2011 3:57 PM
Dodgers Lawyers Call MLB Loan a 'Deal with the Devil'
Posted by Tom Huddleston Jr.
Lawyers representing Los Angeles Dodgers owner Frank McCourt in bankruptcy proceedings likened accepting a loan from Major League Baseball to signing a "deal with the devil.”
The attorneys, including bankruptcy partners Bruce Bennett and Sidney Levinson from Dewey & LeBoeuf and a team from Young Conaway Stargatt & Taylor led by partner Robert Brady, filed a a motion Monday in Delaware bankruptcy court that accused MLB and commissioner Bud Selig, of pursuing a vendetta against McCourt and forcing the team to accept a one-sided financial package instead of a loan that McCourt previously arranged with High Bridge Capital Management, a unit of JPMorgan Chase & Co.
On Wednesday, the court is to hear arguments over whether the Dodgers can go forward with the $150 million loan arranged with Highbridge, or if the team should accept a loan for the same amount proposed by MLB that features a lower interest rate and almost $10 million less in fees.
Bennett told The Wall Street Journal that the MLB offer is not superior to Highbridge's because it is structured as a secured loan, meaning that MLB can use Dodgers' intellectual property and sell the team in the event of a default.
The motion accuses Selig of possessing "an eye jaundiced by irrational animosity toward Mr. McCourt." The Dodgers claim that Selig has treated the team unfairly and is not offering financial assistance equal to what the league extended to other ailing franchises.
MLB countered in its own filings that McCourt rejected the league's loan offer at the lower interest rate in order to secure promised fees for his preferred lender. Robert Manfred, an MLB executive vice president, told the Journal that the team's claims of unfair treatment are off base. "The facts show that the Dodgers, over a substantial period of years, received special treatment and exceptions from rules that are literally unprecedented," he told the Journal.
Thomas Lauria, restructuring head at White & Case, is leading a team from that firm advising MLB, along with lawyers at Proskauer Rose and Fox Rothschild, according to sibling publication The National Law Journal.Make a comment