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Dodgers' debt is $573 million, according to court filing

The team includes the figure in filing its reorganization plan in U.S. Bankruptcy Court. Meanwhile, Oracle founder Larry Ellison's name emerges as another potential bidder for the Dodgers.

January 20, 2012|By Bill Shaikin
  • Dodgers owner Frank McCourt unveils a Dodgers Dreamfield in Northridge in February. McCourt's total debt obligations could be as high as $904 million, not counting income-tax penalties or potential liabilities from a pending lawsuit.
Dodgers owner Frank McCourt unveils a Dodgers Dreamfield in Northridge… (Brian van der Brug / Los Angeles…)

The Dodgers told the U.S. Bankruptcy Court on Friday exactly how much they owe: $573 million.

The team included the figure in filing its reorganization plan, the formal document that explains how a company intends to get out of bankruptcy. For the Dodgers, that means a sale of the team, a process that appears to be getting more competitive by the day.

Larry Ellison, the founder and chief executive of software giant Oracle, has considered pursuing the Dodgers, two people familiar with the matter said Friday. Each person said he did not know whether Ellison would participate in bidding for the team.

Oracle spokeswoman Deborah Hellinger declined to comment.

Ellison is the richest man in California and the third-richest man in the United States, according to Forbes magazine, which in September estimated Ellison's net worth at $33 billion.

Ellison owns several properties in Malibu but maintains his primary residence in Northern California. Within the last three years, he has delivered an America's Cup yachting champion; bought the BNP Paribas Open, saving Southern California's premier tennis tournament from possible extinction; and bid unsuccessfully for the NBA's Golden State Warriors.

In their court filing, the Dodgers said all creditors would be paid in full, primarily with proceeds from the sale of the team. The new owner will inherit deferred player contracts, according to the plan.

The plan is set for court approval April 13, with the winning bidder for the team identified no later than April 6.

The plan does not specifically address how the ownership transfer might affect the Dodgers' legal issues with the family of Bryan Stow, the San Francisco Giants fan beaten and critically injured in the Dodger Stadium parking lot last March. Stow's family has filed a claim in Bankruptcy Court and has sued the Dodgers in Los Angeles Superior Court.

"LAD disputes liability for Mr. Stow's injuries and intends to challenge Mr. Stow's proof of claim," the Dodgers' filing read, with "LAD" used as an abbreviation for the Dodgers. "To the extent that LAD ... may be found liable to Mr. Stow, the debtors believe that this claim may be covered by insurance."

The Dodgers say they intend to exit bankruptcy by April 30, the same day by which outgoing owner Frank McCourt has to satisfy two obligations — to close the sale of the team, under his agreement with Major League Baseball, and to pay ex-wife Jamie McCourt $131 million under the couple's divorce settlement.

In addition, Frank McCourt's attorneys have said a sale could trigger a tax bill of up to $200 million. That would put McCourt's total obligations at up to $904 million, not counting any income-tax penalties or liability to Stow's family.

Opening bids for the team are due Monday. The Dodgers are expected to command at least $1 billion, which would be a record price for a major league club.

McCourt and his advisors think the bidding could hit $1.5 billion. More than a dozen prospective bidders have been publicly identified, including such high-profile figures as Magic Johnson, former Dodgers manager Joe Torre, Dallas Mavericks owner Mark Cuban and the family of the late Roy Disney.

"The Dodgers are not only a storied franchise with truly global appeal, but also present the attractive potential for strong cash flow and significant value enhancement," the Dodgers said in a statement. "The combination of these unique attributes is helping to drive significant interest from potential bidders."

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