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Dodgers Agree To $150 Million Loan From MLB

Nearly two weeks after the judge supervising the team’s bankruptcy instructed the two sides to negotiate a deal, the Los Angeles Dodgers agreed to borrow as much as $150 million from Major League Baseball.

On August 5 the Dodgers appealed the judge regarding the terms of the loan, which gives the team a much needed life line in order to continue business while under court protection in Wilmington, Delaware. Without that, the franchise “will be immediately and irreparably harmed,” claimed team officials in court documents.

Those borrowing stipulations don’t permit the MLB to freeze cash flow or raise the interest rate if the team violates baseball’s constitution. According to the agreement, the loan will bear a variable interest rate based on the London Interbank Offered Rate, plus 6.5 percent.

The Dodgers filed for bankruptcy in June of 2011 after MLB Commissioner Bud Selig turned down a proposed cable-television licensing deal team owner Frank McCourt put together with New’s Corp’s Fox Sports. McCourt started battling with Selig prior to the bankruptcy, charging the commissioner with prejudiced monitoring of the Dodgers books and claimed Selig held him to more stringent standards than other team owners who have encountered financial hardships. Selig, on the other hand, criticized McCourt of mishandling the Dodgers and breaching baseball’s constitution, on one account by filing for bankruptcy without seeking prior permission from the MLB.

The judge said the two sides will have equal opportunities in the approaching months to contest how the franchise should overhaul and move forward. Are you fighting for your rights in a bankruptcy case? Call 800-449-4850 to contact the Southern California business attorney Art Matthews at Matthews Law Firm, Inc. for a complimentary consultation today.

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