Commentary

Dodgers in legal limbo for a while now

By filing Chapter 11, Frank McCourt has put team in the hands of a bankruptcy judge

Originally Published: June 27, 2011
By Jayson Stark | ESPN.com

Not so long ago, the Los Angeles Dodgers were one of the sports cosmos' most exalted franchises. Now, they're like some kind of reality show gone bad.

The thought of this team -- THE DODGERS -- in bankruptcy court was once an unthinkable embarrassment. But we're long past that stage. Now this twist in the plot line fits right into the pitiful descent of the franchise in the Frank McCourt era.

People kept asking the same question Monday, as news of the Dodgers' journey into Chapter 11 Land began to spread: What does THIS mean?

[+] EnlargeBud Selig and Frank McCourt
Stephen Dunn/Getty ImagesBud Selig and Frank McCourt aren't too friendly these days.

And the answer, on one level, is simple, says one sports attorney: "Frank is just doing this to buy time."

But here's one of his big problems: He doesn't have much time.

All he has is about 72 hours to make payroll before the end of this month. Somehow, some way, by the end of the day Thursday, somebody has to cut checks to everybody on the IOU sheet, from Rubby De La Rosa to Manny Ramirez. Plus, according to the documents filed Monday, McCourt has another $18.7 million bill due Friday to fund future deferred payments, reports the Los Angeles Times.

So while it could take months, even years, for the courts to sort out all the ramifications of this maneuver, the first big ring in this circus that you should focus on is the legal free-for-all to determine who is going to sign all those checks.

McCourt issued a statement Monday saying he'd already obtained $150 million in interim financing (from a hedge fund, Highbridge Capital) to make all those payments and to keep the Dodgers chugging ever onward. But any minute now, commissioner Bud Selig's lawyers will be charging into that very same bankruptcy court to say, "Uhhh, not so fast, Frank."

What MLB will argue, other attorneys say, is that the rules of baseball don't allow McCourt to pull this maneuver without the approval of his favorite commissioner. And needless to say, Selig didn't sign off on any of this.

So Selig's legal team will argue that it's not in the best interests of baseball for some hedge fund to lend the Dodgers the big bucks they need to keep operating. Instead, being the magnanimous commissioner he is, Bud Selig will say:

"We'll supply the financing here. No need to rely on a bunch of anonymous financiers. This is how we did it in Texas last year, and look how well that worked out."

Then it's up to the bankruptcy judge who now, for all intents and purposes, controls the fate of this franchise. If the judge sides with Selig, McCourt's big legal gambit could become an official disaster, faster than you could say, "Wait a second. The Dodgers still owe money to Marquis Grissom?"

At that point, other attorneys suggest, baseball will infuse the money it takes to make the Dodgers' payroll -- and then turn its guns on McCourt. It will ask the judge to give McCourt the boot, install Selig's man, Tom Schieffer, as the guy in charge and tell McCourt to get in line with the other creditors.

But wait. There's more legal amusement to come besides the rollicking Bud-versus-Frank histrionics.

There's also -- what else? -- more Divorce Court fun.

Monday's Chapter 11 filing describes Frank McCourt as the "sole" shareholder in Los Angeles Dodgers Holding Company LLC. But his estranged wife, Jamie, wouldn't appear to agree with that description.

Matter of fact, those two are still in a court proceeding of their own in an attempt to determine the answer to that very question.

So she could be headed for court herself, to contest this whole maneuver. Which could throw this team into an even greater state of chaos. Hmmm, does that even seem possible?

But if you're a fan of reality-show melodrama, as opposed to a fan who actually cares if the Dodgers can resume playing baseball without a laugh track, you'll be enthused to learn the lawyers won't be finished work after those two issues are decided. Not by a long shot.

The bankruptcy court now, essentially, runs this franchise. So even if baseball outmaneuvers McCourt this week, McCourt won't be done scorching Bud Selig's portion of the earth.

His next step, other attorneys predict, would be to challenge the commissioner's best-interests-of-baseball powers in that same bankruptcy court. And won't that be a hoot. It's hard to envision McCourt winning that case. But the guns would keep firing deep into the night either way.

And ultimately, it's possible that when the Dodgers eventually get sold, if these pesky bankruptcy issues haven't been resolved, it will be the court running the sale, not Bud Selig.

It was only a year ago, remember, that the Rangers were sold in an auction run by a bankruptcy court. And that was a situation very different than this one -- because their owner at the time, Tom Hicks, "saw the writing on the wall," says one baseball official, and allowed MLB to step in and finance the Rangers' operations without a fight.

Nevertheless, because that sale was a court auction, not an MLB operation, Selig almost wound up with Mark Cuban as part-owner of one of his baseball teams. So don't forget, kids: Once the judges get involved, nothing about the Dodgers figures to be normal for a long, long time.

So Frank McCourt may have thought that going Chapter 11 was his ticket to a rich new TV deal that Bud Selig wouldn't approve. But in truth, there's an excellent chance it will merely be his ticket to many more billable hours.

No matter who prevails, the Dodgers are still going to be embroiled in legal limbo for many, many months. McCourt did an excellent job of guaranteeing that Monday. Too bad it's the only aspect of his job as this team's owner that anyone will ever describe as "excellent."

Jayson Stark is a senior writer for ESPN.com. His latest book, "Worth The Wait: Tales of the 2008 Phillies," was published by Triumph Books and is now available in a new paperback edition, in bookstores and online. Click here to order a copy.

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Senior Writer, ESPN.com

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