Los Angeles Dodgers have filed for Chapter 11 bankruptcy in an effort to buy some time to complete a television-rights deal and ward off creditors.
The Dodgers listed assets between $500 million and $1 billion and debt of as much as $500 million (although the front page of the petition shows liabilities between $1 and $50,000) in a filing today in US Bankruptcy Court in Wilmington, Delaware.
Frank McCourt, the team's owner, has clashed with Major League Baseball Commissioner Bud Selig over the Dodgers, with baseball taking over business operations this year and rejecting a television deal that McCourt said would have assured financial stability for the team.
Most interesting, the petition lists current and former players as the largest unsecured creditors. Manny Ramirez is owed close to $21 million. In many corporate bankruptcies, unsecured creditors receive pennies on the dollar as recover for their unsecured claims.
Makes you wonder what the Dodgers' plans for their bankruptcy case must be. I cannot imagine that the players' association , among other groups, would be too happy if the case plays out where players do not receive their full, contracted amount.
The Dodgers case will be an interesting case to follow.
Read more articles about consumer debt by Ted Connolly, co-author of The Road Out of Debt
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