Diamond Sports’ exclusivity extension motion draws creditor objections

By Sarah Lizee

Olympia, Wash., Aug. 2 – Diamond Sports Group, LLC’s motion seeking a 120-day extension of its exclusive periods to file and solicit votes on a Chapter 11 plan drew limited objections from the official committee of unsecured creditors and an informal first-lien group, according to documents filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the company asked the court to extend the exclusive plan filing period through Nov. 9 and the exclusive solicitation period through Jan. 8.

The committee said the debtors are facing significant time constraints to demonstrate to their league and team partners that they will reorganize and be in a position to broadcast games this fall.

As such, if the debtors are going to successfully reorganize, they need to file a plan of reorganization soon and work with all stakeholders to forge consensus on the terms, the committee said.

The committee said it has been left “on the outside looking in” when it comes to plan negotiations, as the debtors have been focused mainly on accommodating the legal and commercial positions of the first-lien lenders.

“The time is now for the debtors to invite other creditor constituencies into the room to promote meaningful and productive plan negotiations,” the committee said in its limited objection.

Meanwhile, the first-lien group said that while it is supportive of the debtors’ efforts to develop a viable go-forward business plan and a confirmable Chapter 11 plan, that support is conditioned on making actionable progress on a path forward now.

The first-lien creditors hold claims that are secured by substantially all of the debtors’ assets and are funding the cases through the consensual use of cash collateral.

The group said it isn’t willing to “write a blank check in perpetuity,” and the debtors must use the coming weeks to finalize a go-forward business plan and negotiate a confirmable plan.

Diamond Sports Group is an independently managed and unconsolidated subsidiary of Sinclair Broadcast Group. Diamond owns the Bally Sports Regional Sports networks, a provider of local sports. The Baltimore-based company filed Chapter 11 bankruptcy on March 14 under case number 23-90116.

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