Barely a week after sending the Los Angeles Dodgers into bankruptcy, Frank McCourt has commenced with his effort to make baseball open its books. In a motion and supporting papers filed today in the United States Bankruptcy Court for the District of Delaware, McCourt's attorneys lodged requests for a wide range and deep volume of information. Among the Dodgers' requests:
- Pretty much everything to do with Major League Baseball's investigation of Dodgers' operations.
- McCourt is especially concerned with the details behind the MLB-appointed monitor, Tom Schieffer, and even asks about Schieffer's potential interest in acquiring a portion of the Dodgers. Frank's filings also indicate a suspicion about Joe Torre's communications with Major League Baseball concerning Dodgers operations.
- Frank McCourt seeks information regarding baseball's rejection of the Fox deal.
- The Dodgers asked baseball for details of other teams' TV deals. Specifically, McCourt wants to openly compare the proposed Fox deal to those entered into by the Mariners, Rangers, Astros, Mets, and one currently being explored by the Padres. McCourt's goal is to show that the Fox deal was favorable to the Dodgers and that Selig's rejection was motivated primarily by a desire to force Frank McCourt out of baseball.
- The Dodgers also want information about steps taken by baseball to squeeze McCourt financially.
- In addition to denying McCourt the Fox deal, the Dodgers' filing also indicates that MLB cut off the Dodgers from the MLB-offered seasonal line of credit. McCourt also claims that in the weeks leading up to the Dodgers' bankruptcy filing, baseball changed its rules for obtaining debt financing, forcing Frank's hand further. Frank also asked baseball to turn over any documents about MLB's plans to remove McCourt as owner or even terminate the franchise altogether.
- Finally, McCourt also wants baseball to reveal its handling of other teams in periods of financial stress.
- Frank wants to know about baseball's approval of the Rangers' prepackaged bankruptcy, how baseball dealt with the Mets during their recent struggles, and baseball's action (or inaction) concerning other teams in violation of the sport's debt service rules.
McCourt's goal in these information requests is two-fold. First, he wants to begin establishing his claim that he has been treated wrongfully by Bud Selig and the Commissioner's office. Second, he would like to make this process as painful as possible for MLB. Forcing baseball to open its books might be painful, indeed.
For its part, attorneys for Major League Baseball have also filed their own extensive requests for document production. Baseball seeks information primarily on the debtor-in-possession (DIP) financing McCourt arranged to get the club through its bankruptcy. MLB, of course, seeks to persuade the court that the financing is on highly unfavorable terms, and that the interest and fees charged are unfair to the team's creditors.
Baseball also seems to cast doubt upon the McCourt camp's assertion that it went to enough effort to secure affordable financing. Additionally, MLB seeks more detailed information on how the Dodgers are budgeting cash over the next few months.
Fans accustomed to the McCourt divorce's slow trek through court might be surprised at how fast the bankruptcy is unfolding. Indeed, both Frank McCourt and MLB's document production requests call for full responses very soon. The scope of discovery is a fight of its own, but the haste with which the sides are proceeding is indicative of the urgency of the situation. Either Frank McCourt gets a TV deal pushed through, and relatively quickly, or he'll have a hard time preparing an approvable plan to emerge from the bankruptcy.
One of the more interesting developments on the horizon is a liquidation analysis of the five McCourt entities currently in bankruptcy. Prior to gaining approval of any plan, the Dodgers must make a showing of what the creditors would receive if the assets of the five companies were sold at auction. The Dodgers' plan will then be judged by the extent to which it is more beneficial to creditors. It is in this liquidation analysis, at the latest, that McCourt and MLB might first square off on the related-company transactions implicating the Dodger Stadium parking lots and the right to sell non-premium Dodgers tickets.