First Day Motions

In a chapter 11 bankruptcy, the Debtor, in this case, the Los Angeles Dodgers LLC has to get permission to do certain things that are required to keep a business operational.  Motions were filed in the U.S. Bankruptcy Court for the District of Delware in Wilmington, DE, the first day after the case was filed.  The judge assigned to this case is Kevin Gross.  He is not the former MLB pitcher that pitched for the Dodgers.  He started the hearing explaining his style and said that he wanted to have one corny comment.  He told the attorney of record for the Dodgers, “Batter up” to start the hearing.   

Attorneys for Debtor, the United States Trustee, Jaime McCourt, Fox Sports Net 2 and Major League Baseball all appeared.  All made somewhat negative comments that they were not given any notice of this hearing or the bankruptcy filing.   

The key point emphasized by the Dodgers attorneys was that this debtor’s balance sheets solvent, a rather rare occurence in bankruptcy court.  The parties agreed not to wage their full arguments at this hearing but to keep it about maintaining the on-going concern value of the franchase and maximize value for all involved.  The Dodgers attorneys emphazied that Major League Baseball and them are in an adversarial position; however, the attorney for MLB, Tom Loria, indicated that the Dodgers are one of their crown jewels and MLB Is not adversarial to the Dodgers.  Loria did make it a point that MLB was adversarial to Frank McCourt. 

Most motions in the matters are fairly rountine interim motions that are required to keep the team operating.  Among them were motions for permission to use their current bank account and cash management, to pay their utilities and insurance, to pay their prepetition and on-going tax obligations, and wages, salaries and benefits in the ordinary course of business.  All motions were granted without any significant opposition.  Judge Gross joked “I have not seen a motion quite like this one,” to a chorus of chuckles in the courtroom when referring to the content of the motion to pay wages. 

A motion to maintain customer customer programs, specifically, the Dodger Dollars, was also made.  It too was granted without opposition.  The judge found a strong likelihood of irreparable hmar would result if the motion was not granted. 

There was finally a motion to pay critical vendors over the next few days.  The list of 2 was amazingly slim given the large complexity of the Dodgers enterprise.  The Dodgers windled the vendors down to 2.  One is a credit card from Bank of America that the Dodgers use to book their travel on the road.  There is no practical way to pay for this without the credit card.  The second vendor was their baseball academy in the Domican Republic.  Both motions were granted.  The credit card is owed between $200,000 to $300,000 and the baseball academy is owed about $30,000.   This motion was granted without any opposition.