Dodgers put debt at $573 million
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The Dodgers told the U.S. Bankruptcy Court on Friday exactly how much they owe: $573 million.
The Dodgers included the figure in their reorganization plan, the formal document that explains how a company intends to get out of bankruptcy. For the Dodgers, that way is a sale of the team.
The Dodgers said all creditors would be paid in full, primarily with proceeds from the sale of the team. The new owner will inherit deferred player contracts, according to the plan.
The plan is set for court approval April 13, with the winning bidder for the team identified before then.
The plan does not specifically address how the ownership transfer might affect the Dodgers’ legal issues with the family of Bryan Stow, the San Francisco Giants fan beaten and critically injured in the Dodger Stadium parking lot last March. Stow’s family has filed a claim in Bankruptcy Court and has sued the Dodgers in Los Angeles Superior Court.
‘LAD disputes liability for Mr. Stow’s injuries and intends to challenge Mr. Stow’s proof of claim,’ the Dodgers’ filing read, with ‘LAD’ used as an abbreviation for the Dodgers. ‘To the extent that LAD ... may be found liable to Mr. Stow, the debtors believe that this claim may be covered by insurance.’
The Dodgers say they intend to exit bankruptcy by April 30, the same day by which outgoing owner Frank McCourt has to satisfy two obligations: (1) close the sale of the team, under his agreement with Major League Baseball; (2) pay his ex-wife Jamie $131 million, under his divorce settlement. In addition to the $573 million in debt and $131-million divorce settlement, Frank McCourt’s attorneys have said a sale could result in up to $200 million in taxes. That would put McCourt’s total obligations at up to $904 million, not counting any income tax penalties or liability to Stow’s family.
Opening bids for the team are due Monday. The Dodgers are expected to command at least $1 billion, which would be a record sale price for a major league club, and more than a dozen prospective bidders have identified themselves publicly.
‘The Dodgers are not only a storied franchise with truly global appeal, but also present the attractive potential for strong cash flow and significant value enhancement,’ the Dodgers said in a statement. ‘The combination of these unique attributes is helping to drive significant interest from potential bidders.’
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— Bill Shaikin