Thursday, August 11, 2011

Financially Beleaguered Baseball Club 'Dodges' Threat Of Foreclosure Under Terms Of New $150M Financing Deal With MLB; Arrangement Awaits Court OK

The New York Times reports:

  • Under the terms of a $150 million loan agreement submitted to federal bankruptcy court on Friday, Major League Baseball cannot seize control of the Los Angeles Dodgers if the team defaults.

  • The worst that can happen — in the narrow case of default — is they can stop funding,” said Bruce Bennett, one of the Dodgers’ lawyers. “It is not a secured loan, so baseball can’t foreclose on anything.”

  • Bennett said that the team’s current cash needs were not dire and that it did not immediately need to ask for any of the $150 million. “They have more than adequate resources to meet all their payables as they come due,” he said, adding, “We don’t need to borrow the maximum amount of the loan.”


  • At a hearing in bankruptcy court in Delaware last month, the Dodgers insisted they wanted to borrow $150 million from Highbridge Capital, a hedge fund, despite a higher interest rate than baseball offered and the risk of foreclosure in case of a default. Gross rejected the Highbridge loan and told M.L.B. and the Dodgers to negotiate a deal.

For the story, see Terms of Loan From Baseball Ease Dodgers’ Fear of Seizure.

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