Los Angeles Dodgers File Bankruptcy
Many Los Angeles businesses fear filing for bankruptcy due to the stigma that exists socially after a business declares bankruptcy. In truth, bankruptcy was established to provide relief to a struggling business by either discharging their debts, or configuring a repayment plan to help the business get back on their feet. No business is exempt from financial hardships and the baseball team the Los Angeles Dodgers are no different.
In June of 2011, the LA Dodgers filed for Chapter 11 bankruptcy. Although it is uncommon to see the words bankruptcy and a major league baseball team’s name in the same headline, just last year the Texas Rangers filed for bankruptcy. In the current economic climate, many businesses are left with no alternative than to file for bankruptcy.
LA Dodgers $150 Million Bankruptcy Financing Plan
On Friday, a Delaware judge rejected the Los Angeles Dodgers’ proposed $150 million bankruptcy financing plan. This decision could likely force the Dodgers to accept a financing offer from Major League Baseball. The judge issued an eight-page decision, two days after presiding over a hearing on the competing financing plans.
The Dodgers had sought approval of their proposed arrangement with hedge fund Highbridge Capital, but the judge ruled that Frank McCourt (Los Angeles Dodgers owner) cannot utilize the financing that he obtained through Highbridge Principal Strategies. McCourt had hoped to use the financing from Highbridge to keep the LA Dodgers afloat during their time in bankruptcy. Instead, he was ordered to negotiate with Major League Baseball (MLB) in order to secure financing from the league.
The judge believed that using the Highbridge loan, a plan, which had Frank McCourt on the hook for over five million dollars “clearly compromised McCourt’s judgment.” It has been speculated that the judge thought McCourt was unwilling to find financing through the league because it would cost him money even though following that course was a better option for the Dodgers and for their creditors.
Your Los Angeles Business Bankruptcy Attorneys
If you own a business and you are overwhelmed by your debts contact one of our bankruptcy attorneys today. We offer free business bankruptcy consultations for prospective clients. There is a bright future ahead for your business post-bankruptcy. Let us assist you and help you to reach a positive outcome to your financial hardships. Call us at (888) 728-0044 or email us here.
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