LOS ANGELES (CBS) — The Los Angeles Dodgers have filed for Chapter 11 Bankruptcy Protection.
According to a statement released by the team early Monday morning, the Dodgers filed for Chapter 11 Monday in a Delaware court “in order to protect the franchise financially and provide a path that will enable the Club to consummate a media transaction and capitalize the team.”
The filing also includes Dodger Stadium.
KNX 1070’s Legal Analyst Royal Oakes discusses the filing.
Dodgers owner Frank McCourt is blaming Major League Baseball Commissioner Bud Selig’s recent refusal to approve a multibillion dollar Fox deal as the reason for the filing.
“We turned the team around financially after years of annual losses before I purchased the team. We invested $150 million in the stadium. We’ve had excellent on-field performance, including playoff appearances four times in seven years. And we brought the Commissioner a media rights deal that would have solved the cash flow challenge I presented to him a year ago, when his leadership team called us a ‘model franchise.’ Yet he’s turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today. I simply cannot allow the Commissioner to knowingly and intentionally be in a position to expose the Dodgers to financial risk any longer. It is my hope that the Chapter 11 process will create a fair and constructive environment to get done what we couldn’t achieve with the Commissioner directly,” McCourt said in a press release.
The Chapter 11 filing will allow the team to use $150 million of debtor-in-possesion financing to meet current financial obligations such as payroll, salaries, benefits and ordinary day-to-day-business.
Dodger officials also said all ticket prices will remain the same and purchased tickets and promotions will continue to be honored.
The bankruptcy filing lists 40 of the Dodgers’ largest creditors, which includes past and current players and Dodger announcer, Vince Scully.
Manny Ramirez: $20,992,086
Andruw Jones: $11,075,000
Chicago White Sox: $3,500,000
Juan Uribe: $3,241,758
Andre Ethier: $559,066
Vince Scully: $152,778
The top 40 creditors are owed over $74 million. For a full list of creditors, click here.
In a statement through her attorney, Jamie McCourt said, “The rule or ruin philosophy that appears to have motivated today’s filing is bad for everyone who cares about, or has an interest in, the Dodgers.”
Jamie McCourt’s lawyer, David Boies, went on to say, “Today’s bankruptcy filing is disappointing and disturbing. During the years Jamie McCourt was CEO of the Dodgers, the team’s financials, although heavily leveraged, were stable and improving. In the almost two years since Mr. McCourt fired her and took over management of the Dodgers, Mrs. McCourt has made repeated proposals to resolve her right to 50% of the team in a way that would preserve the value and integrity of the Dodgers for Dodger fans, for Los Angeles, and for her family. She has continued to do so despite the many personal attacks against her by Mr. McCourt and his representatives.”
If Frank McCourt misses Thursday’s payroll deadline, the MLB will be permitted to take over the Dodgers.