With the automatic stay in place, MLB Commissioner Bud Selig should be prevented (for the moment, at least) from seizing control of the team or taking any other punitive action against McCourt.
Where is Frank McCourt going to come up with the money to run the Dodgers while the Dodgers are in bankruptcy?
This is the first issue for the Bankruptcy Court, and will probably be addressed in a preliminary way at a hearing today before the Bankruptcy Court. Companies in Chapter 11 bankruptcy frequently seek special “debtor in possession” (DIP) financing to stay in operation during bankruptcy. DIP lenders get a special priority – they are repaid in bankruptcy before just about everyone else. McCourt has a proposal in place to borrow $150 million from a hedge fund affiliated with J.P. Morgan Chase. The proposal is, in the words of Craig Calcaterra, a “crappy loan”, at a 10% interest rate, with a $4.5 million fee on top of it, but the loan would keep the Dodgers afloat.… Click here to read the rest