The settlement between Major League Baseball and Los Angeles Dodgers owner Frank McCourt didn’t resolve all their differences: Baseball Commissioner Allan “Bud” Selig now wants the league’s $7.6 million in legal bills and costs paid for by the team before it emerges from bankruptcy.
The Dodgers filed for Chapter 11 protection last year. Following a contentious court battle, McCourt and the league agreed on Nov. 2 upon a reorganization plan that called for selling the team through an auction. On March 27, a group of investors led by Los Angeles Lakers star Magic Johnson and Guggenheim Partners bought the team for $2.15 billion. A hearing to approve the sale is scheduled for April 13 before U.S. Bankruptcy Judge Kevin Gross in Delaware.
The latest filings are not expected to affect the sale.
On March 20, Dodgers counsel Donald Bowman, an attorney at Young Conaway Stargatt & Taylor in Wilmington, Del., filed a notice declaring that the team owes no money on contracts, leases or other agreements with Major League Baseball that the Dodgers must assume under the reorganization plan.
On April 3, attorneys for the league filed an objection, saying that, under the Major League Constitution, the Dodgers are liable for all “fees, costs and expenses incurred by [the league] associated with disputes and litigation between [the team] and [the league] including, without limitation, those arising from enforcement of the Baseball Agreements.”
The league cited $115,110 in legal fees, costs and expenses charged in anticipation of the team’s bankruptcy filing. Of that, White & Case, the league’s lead counsel in the bankruptcy, charged nearly $3,700. Proskauer Rose, which served as general counsel to the league before the filing, handling labor and employment matters including collective bargaining agreements, charged $111,437.
After the filing, the league racked up another $7.78 million in professional fees and expenses through Feb. 22, the document said. Of that, $7.5 million was for legal fees and costs.
“As is made clear in its previous filing on this matter, the debtor does not owe MLB the fees in question,” insisted Robert Siegfried, spokesman for the Dodgers, in a prepared statement. The Dodgers are expected to file their response to the league’s filing on April 6.
League attorney John K. Cunningham, a partner in the Miami office of White & Case, declined to comment.
Of the legal fees associated with the bankruptcy proceedings, White & Case charged more than $6.15 million and Proskauer Rose charged nearly $888,000. Longtime league counsel Paul, Weiss, Rifkind, Wharton & Garrison charged almost $235,000 to review bidder applications and other agreements, and Fox Rothschild, the league’s Delaware counsel, billed $231,200.
The dispute now goes before retired U.S. District Judge Joseph Farnan, the mediator in the case.
Contact Amanda Bronstad at [email protected].
