The Dodgers today prevailed in their dispute with California-based merchandising vendor Facility Merchandising Inc., gaining court approval to continue their bankruptcy reorganization efforts on the current schedule. FMI sought an accelerated decision by Sept. 26 on whether the club will continue or terminate a current, eight-year merchandising pact, arguing it was in financial distress amid the need to order goods for the '12 season over the next few weeks while team attendance flounders.
But Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware said the club has not violated the contract with FMI. Additionally, FMI retains the ability to seek damages later on if it loses the Dodgers contract after buying merchandise. "There are numerous reasons in fact and law for me to rule this way," Gross said, adding the Dodgers are entitled to complete their reorganization plan before deciding on the fate of the FMI contract.
"There is no reason for us to be placed in a difficult position when FMI is the defaulting party," said Dodgers attorney Sidney Levinson, referring to a royalties payment of more than $330,000 from FMI withheld as part of the dispute. FMI pays the Dodgers a minimum of $4.5M a year in guaranteed royalties and signing bonus installments.
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FMI President & CEO
Milton Arenson testified as part of today's hearing that the club's actual turnstile attendance count this year will end the '11 season between 2.2-2.3 million, down about 25% from last year. The club's full attendance figure, due to end the season at nearly 3 million, is based on tickets sold, also indicating a heavy no-show rate at Dodgers Stadium. Both the listed attendance and turnstile counts will easily be the lowest of Owner
Frank McCourt's tenure. Arenson on the witness stand described the club's current attendance patterns as "horrific."
"This whole thing is definitely not a pleasant situation. We're having to read about it [in Los Angeles] every day," Arenson said, referring to the bankruptcy case and the McCourts' divorce.
Meanwhile, a small group of Dodgers season-ticket holders have retained attorneys from Steptoe & Johnson in L.A. and are seeking recognition as an official committee in the club's bankruptcy case. Their filing does not list what the committee is seeking as potential relief.
Among the season-ticket holders listed for the prospective is the family of late singing icon Frank Sinatra.
