Los Angeles Dodgers’ Bankruptcy Sets Record for Court Expenses
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Los Angeles Dodgers’ Bankruptcy Sets Record for Court Expenses

February 22, 2012


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The recent bankruptcy filing of the Los Angeles Dodgers has racked up record legal expenses for the bankruptcy of an American sports franchise, according to a report from The Sporting News.

Sources indicate that documents filed last week in U.S. Bankruptcy Court for the District of Delaware reveal that, during the seven months that ended on December 31, 2011, the debt-ridden franchise spent nearly $16 million in bankruptcy-related fees and expenses.

The team’s actual bankruptcy filing occurred during the middle of that expensive period on June 27, 2011, and drew widespread attention for the public battle between Frank McCourt, the owner of the Dodgers, and Bud Selig, the commissioner of Major League Baseball.

The fees accrued by the Dodgers vastly outpace the fees by other sports franchises that have filed for bankruptcy in the past few years. Most of the other professional sports bankruptcies—involving teams such as the Chicago Cubs and Pittsburgh Penguins—saw costs ranging between $5 million and $8 million.

The second-most expensive sports bankruptcy ever filed is believed to be that of the Phoenix Coyotes, which spent a little more than $14 million during its contentious team bankruptcy.

And The Sporting News observes that the hefty fees and expenses paid by the Dodgers only include basic fees like court costs and payments for exclusive local bankruptcy lawyer.

Sources claim that other entities, including Major League Baseball, Fox Sports Net, and unlucky vendor Facility Merchandising Inc. have all had to pay millions of dollars in legal fees to represent their own interests in bankruptcy court.

So, the Dodgers messy filing has become a financial stimulus of its own, which isn’t much of a surprise considering that the team’s owner and his ex-wife, Jamie McCourt, racked up more than $20 million in legal fees during their wild divorce earlier last year.

In addition, some observers aren’t surprised that the Dodgers bankruptcy has been expensive and time-consuming. According to Thomas Salerno, an attorney who worked the Phoenix Coyotes bankruptcy case, "The Dodgers bankruptcy was born in the flames of litigation, and continued to engender a huge amount of litigation in a very short period of time."

Salerno observed that bankruptcy can sometimes cost a bit of money, especially for large companies but he was not surprised that the Dodgers case was expensive, given "all the issues involved with the Dodgers and the higher costs of the New York and (Los Angeles) law firms involved."

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