Dodgers season ticketholders get two new seats on creditors committee

By Jim Witters

Wilmington, Del., Oct. 25 - Los Angeles Dodgers LLC season ticketholders will receive representation on the official committee of unsecured creditors, increasing the committee's membership by two.

The decision came late Monday when the Dodgers and the ad hoc committee of season ticketholders reached agreement. The move came in response to the ticketholders' request for representation as an official committee in the Chapter 11 case.

Under the agreement, the U.S. Trustee's office will appoint two ticketholders to the creditors committee.

Judge Kevin Gross approved the stipulation during a hearing Oct. 25 in the U.S. Bankruptcy Court for the District of Delaware. He said that, without revealing his leanings in the dispute, he was pleased with the agreement.

Left unresolved is the dispute over whether the ticketholders are creditors. The stipulation filed with the court states that "there is no admission by the debtors or the creditors' committee that the season ticket holders are, in fact, creditors, or by the ad hoc committee that season ticket holders are not creditors."

Privileged communication

Dodgers attorney Sidney P. Levinson sought an order from judge Gross on Oct. 25 compelling Major League Baseball to produce more documents for use by the debtors in the evidentiary hearing scheduled to begin Oct. 31.

Levinson said MLB and Fox Sports Net West 2, LLC are engaged in talks, in which the baseball commissioner is trying to dissuade Fox from bidding on future telecast rights to Dodgers games.

Fox holds the current telecast rights and maintains that the debtors' desire to auction the rights violates the terms of the Fox contract.

Levinson told the court MLB and Fox are asserting that discussions among their outside counsel are confidential as common interest communications. He argued that they are not privileged, and sought the production of all documents in which Fox and MLB discussed the Dodgers.

"The fact that Major League Baseball may enter into an agreement with a potential bidder on the telecast rights is deeply troubling. It would deprive the Dodgers of the proceeds it needs to emerge reorganized from these proceedings," Levinson said.

Bernard M. Resser, representing Fox, said Levinson is seeking to "gloss over" the question of whether communication among outside counsel could lead to discoverable and admissible evidence. Resser said the relevant parts of those discussions come before the court in the form of filings, and the thought processes behind the filings are not subject to disclosure.

"What are we going to do? Depose all the lawyers and ask them what they talked about?" Resser said. It could "become a sideshow," he said.

Glenn M. Kurtz, representing MLB, said there are no documents related to the commissioner's attempts to dissuade Fox, because there have been no attempts by the commissioner to do so. He said the documents at issue are work product.

Levinson said one document produced by Fox concerns a conversation between Fox and the baseball commissioner's office in December 2010. The contents of the document are confidential and could not be discussed in open court, but Levinson contends the document proves the commissioner engaged in communications with Fox about the Dodgers.

Resser said the document is an internal memorandum, which describes a conversation between a Fox executive and the baseball commissioner, and the document was turned over to the debtors.

In an order entered late Tuesday, Gross found that the common-interest doctrine applies for post-petition communications between Fox and MLB that relate to the Dodgers' motion to market telecast rights. The doctrine does not apply to pre-petition communications, and the parties must supply the Dodgers with any such documents.

The doctrine does not apply to communications concerning MLB's motion to terminate exclusivity, filed in an attempt to force a sale of the team by Frank W. McCourt, Gross ruled.

"While Fox clearly has a common interest with MLB on the telecast rights motion, it does not have a common interest when it comes to ousting Mr. McCourt," Gross wrote.

"MLB and Fox shall produce communications regarding the motion to terminate, including documents relating to communications between outside counsel," Gross ruled.

Production of documents

Gross also ordered MLB to produce documents sought by the debtors, but contested by MLB.

Those documents include the following:

• All MLB press releases about the Dodgers dating from 2004. Levinson said press releases from 2004, when Frank W. McCourt bought controlling interest in the team, include comments from the commissioner praising the financing McCourt used. That praise stands in contrast to the current MLB argument that the team was over-leveraged from the start.

• All documents in which former Dodgers employee and current MLB employee Charles Steinberg communicated with MLB about the Dodgers. Levinson said Steinberg is under a non-disclosure agreement with the Dodgers.

• Documents related to the decision by MLB to appoint a monitor for the Dodgers and the reasoning behind the selection of the person chosen to be the monitor.

• The minutes of MLB committees meetings at which the Dodgers were discussed. Levinson said, and Gross agreed, that the debtors are entitled to the minutes and to any notes or drafts of minutes not officially adopted by the committees.

Divorce settlement

At Kurtz' request, Gross asked Levinson to contact McCourt and request a copy of the divorce agreement between McCourt and his ex-wife, Jamie McCourt.

Kurtz said he subpoenaed the agreement, but has been unable to get a copy from McCourt or McCourt's private counsel.

The document is material to the bankruptcy case, because McCourt is in "a liquidity crisis" and may divert proceeds from the team to help pay the reported $130 million divorce settlement, Kurtz said. The agreement reportedly contains provisions for payments related to the sale of the Dodgers' telecast rights.

McCourt's private counsel was not in the courtroom or on the teleconference. Levinson said he played no role in the divorce proceedings.

Major League Baseball team the Los Angeles Dodgers filed for bankruptcy on June 27. The Chapter 11 case number is 11-12010.

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