Just three days before the next payroll comes due, the Los Angeles Dodgers filed for Chapter 11 bankruptcy protection Monday, with owner Frank McCourt blaming Baseball Commissioner Bud Selig for blocking a plan to improve the team’s finances.
The Chapter 11 filing in a Delaware bankruptcy court said that Dodgers have a source for $150 million in interim financing to cover daily operations. A hearing to approve the financing is set for Tuesday. The bankruptcy filing blocks Major League Baseball from taking over the team on financial grounds.
Selig announced last week that he wouldn't approve a Dodgers television deal with Fox Sports that reportedly was worth up to $3 billion.
McCourt in a statement blamed Selig for refusing to approve the multibillion-dollar TV deal that he contends would keep the team afloat. “He's turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today,” he said. “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."
The Chapter 11 petition lists assets of as much as $1 billion and debt of as much as $500 million. Manny Ramirez, who last played for the Dodgers in 2010 and retired from the Tampa Bay Rays in April, is listed as the largest unsecured creditor with a claim of about $21 million.
McCourt and his estranged wife Jamie – the franchise’s former chief executive – have been embroiled in a contentious divorce where their lavish spending habits were detailed. The couple took out more than $100 million in loans from Dodger-related businesses, according to filings in the case.
MLB in April took the unusual step assuming control of the troubled franchise, with former Texas Rangers President Tom Schieffer appointed to monitor the team.
In a statement late Monday afternoon, Selig argued that McCourt's financial situation "was caused by Mr. McCourt’s excessive debt and his diversion of club assets for his own personal needs."
"My goal from the outset has been to ensure that the Dodgers are being operated properly now and will be guided appropriately in the future for their millions of fans," he said. "The action taken today by Mr. McCourt does nothing but inflict further harm to this historic franchise."
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