Hearing on Dodgers’ financing set for mid-July
Los Angeles, CA, United States (AHN Sports) – A day after filing for bankruptcy protection, Los Angeles Dodgers owner Frank McCourt received a favorable ruling Tuesday on hedge fund financing he arranged to cover the team’s expenses and all financial obligations through the year.
On Tuesday, a Delaware court, handling the Chapter 11 bankruptcy, which was filed Monday, granted interim approval to a $150 million bankruptcy financing arrangement sought by McCourt to address the cash-strapped ballclub’s financial concerns, including this week’s player payroll.
Many observers see it as an initial victory for McCourt in a bankruptcy court battle with Major League Baseball, which blasted McCourt for using the team’s money for his own interests.
In an objection filled by MLB about two hours prior to Tuesday’s hearing, the league also opposed the $150 million of debtor-in-possession financing that McCourt sought to keep the team afloat.
According to MLB, it is willing to provide through its own banks the financing for McCourt at much better terms – 7 percent interest rate and no fees, the Los Angeles Times reported.
The loan that McCourt obtained carried an interest rate of at least 10 percent and a $4.5-million fee, according to the newspaper.
A hearing was set for July 20 to determine whether McCourt can utilize the full amount of the $150-million loan he obtained or MLB’s alternative loan offer should be approved instead.
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