A third hearing will be held today in Wilmington, Del., on the ongoing Dodgers bankruptcy case, though it is not nearly as overarching as a July 20 session focused on the club's interim financing. Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware will hear arguments on the club's merchandising dispute with vendor Facility Merchandising Inc.
FMI said it is facing a serious "liquidity squeeze," and says it needs to know the status of its contract with the club before buying next season's merchandise and making further contract payments to the Dodgers. Bankruptcy law allows the Dodgers an option to walk away from the contract. The club argues it should be allowed to reorganize on its own timetable, and that FMI is using the bankruptcy filing as an excuse to amend or exit the deal. FMI pays the Dodgers at least $4.5M per year in guaranteed royalties and signing bonus installments.
MLB and the Dodgers today also intend to file jointly a supplemental order regarding payment of wages, benefits and other monies owed to employees before the club's June 27 bankruptcy filing. The league had argued the Dodgers were cherry-picking which employee obligations to honor.
Meanwhile, the Dodgers' attempt to hire Blackstone Advisory Services L.P. as an advisor to help the club reorganize its finances, develop a long-term business plan and market the club's cable TV rights has been adjourned until Sept. 26. Fox Sports filed an objection to the proposed hire, saying it would trample on its existing rights with the club that extend through the '13 season.
