The Los Angeles Dodgers’ bankruptcy case is a fascinating study in what happens when too many people become stakeholders in a sinking institution. The case pits Major League Baseball and its commissioner, Bud Selig, against the LA Dodgers; but the LA Dodgers may have become a personal piggy bank for Frank McCourt, the team’s owner. At the same time, the Sinatra family, representing the season ticket holders, wants to have a say in what happens to this team.
More intrigue in Dodgerland
October 12th, 2011Some Southern California bankruptcy stories
October 4th, 2011Over in Garden Grove and Santa Ana, the Shuller family may lose its place at the head of the table because the creditors’ committee objects to insiders receiving any dividend before outside creditors are paid in full. The Shullers’ attorney is sanguine about prevailing, but I think the creditors’ committee has the better argument here: why should family members get paid the same as regular creditors, especially when the church supported a high-income lifestyle for years?
Across the country, in Wilmington, Delaware, a bankruptcy judge is considering the LA Dodgers’ case. Major League Baseball contends that the Dodgers broke the Commissioner’s rules; the Dodgers want to put on evidence that the Commissioner enforced the rules selectively, and that therefore the Dodgers should have more latitude in entering into television contracts. I think the Commissioner has the better argument here: the Dodgers signed contracts binding them to specific rules, and the Commissioner’s dealings with other owners are irrelevant to the Dodger-MLB relationship.