A judge on Thursday refused the Dodgers' request to force the league to produce a slew of documents relating to everything from the New York Mets' dealings with convicted Ponzi schemer Bernard Madoff to e-mails with former Dodgers manager Joe Torre.
Delaware bankruptcy Judge Kevin Gross said at a telephonic hearing on Thursday that the team’s requests were too broad for the issue at hand—whether a proposed $150 million bankruptcy loan from a hedge fund unit of J.P. Morgan Chase and Co. is appropriate.
He also said a July 20 hearing on the loan should not turn “into a trial of the commissioner,” though Gross indicated that the court may have to consider questions about the motivations and actions of the commissioner at some point.
The dispute stems from the Dodgers’ fight with the league over financing the team’s operations in bankruptcy.
McCourt arranged a loan from the Highbridge hedge fund unit of J.P. Morgan. The league has argued it can provide the loan more cheaply, and with fewer strings attached. The Dodgers want the judge to reject the league’s proposed loan, saying it should not be forced to borrow from a hostile party.
The Dodgers said in a statement after the hearing that they still expect Gross to approve their proposed loan with Highbridge.
“As the court indicated, there will be other opportunities in this bankruptcy case for the Dodgers to obtain the discovery that MLB does not want to share with the Dodgers and the court,” said the statement.
Thursday’s decision is the second setback for the team in court. In its first bankruptcy hearing, the Dodgers agreed to modify terms of the Highbridge loan to drop requirements that the team sell its cable television rights by a certain date.
The Dodgers and the league have traded accusations of blame for the team’s bankruptcy. The Dodgers pin it on the league’s rejection of the team’s proposed cable deal with Fox Sports, which would have provided the team with funds to meet payroll.
The league shot back in court papers filed Wednesday saying that McCourt seemed unconcerned about looming payroll when he tried to get $20 million of team money weeks before the Chapter 11 filing.
The league has also accused McCourt, who is simultaneously waging a divorce battle with his ex-wife for control of the Dodgers, of diverting $100 million of team revenue for his personal use and “lavish” lifestyle.
Anyway you cut it, this is getting uglier by the minute and it doesn’t look good for McCourt.
If you conduct business in a way that makes Bud Selig look like the guy who has his shit together, you are doing something terribly, terribly wrong.
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