A mere three days before the payroll comes due — payroll that Frank McCourt can’t meet — the Dodgers have filed for bankruptcy, reports Richard Sandomir. With that, the legal game begins.
Obviously the situation is fluid, and more details will stream in as the morning and day progresses, but for the time being, this could buy McCourt some time. Why? because a bankruptcy filing puts a halt on all legal action with respect to the bankruptcy estate (i.e. the Dodgers).
McCourt will certainly argue that this will prevent a takeover from Major League Baseball, though the court may decide differently when it gets a chance to weigh in, likely in the next few days.
The problem for McCourt is that the kind of bankruptcy the Dodgers have certainly filed is designed to reorganize the financial house.
Frank McCourt, however, does not have a plan available to him to do such a thing or else he would have already done it.
The filing isn’t yet circulating, but my guess is that he’s going to ask the court to order that the Fox TV deal be executed — assuming Fox wants to still do it, which it has been reported it may not — thereby providing funding.
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