The sale of the Dodgers and Dodger Stadium to Guggenheim Baseball Management was confirmed Friday night by Federal Judge Kevin Gross in his Delaware court, over Major League Baseball's objections related to desired time for reasonable review of details.
Nearly 10 months after Frank McCourt put the club in Chapter 11 bankruptcy protection, when he was about to miss payroll, Gross approved the $2.15 billion sale to controlling partner Mark Walter of Guggenheim Partners and backers that include former Lakers great Magic Johnson, longtime baseball executive Stan Kasten, Los Angeles entertainment executive Peter Guber and investors Bobby Patton and Todd Boehly.
In addition to attorneys, attending the hearing in Wilmington were McCourt, Walter, Kasten and Eric Holman (president of Magic Johnson Enterprises).
"I congratulate Mr. McCourt, who was able to see the big picture, and $2 billion is a very big picture," said Gross. "I hope this will bring a very refreshing air to baseball in Los Angeles, which I have said before is a franchise of mythical proportions. I'd like to have seen in the documents that they can't sign Cole Hamels. I didn't see it, but I may insert it."
Gross' baseball-tinged humor only came at the conclusion of what turned into a day-night hearing that concluded at 9 p.m. ET, only three hours before a deadline needed to assure the club would change hands by April 30.
"We are pleased to have successfully concluded the Chapter 11 reorganization process," the Dodgers said. "All the organization's goals in the reorganization cases have been achieved. We look forward to returning all of our attention to Dodger baseball."
Approval came over objections from MLB that it needed "reasonable time" to review documents from the sale and a right to remedy -- to the point of vacating -- Gross' confirmation of the sale if documents yet to be produced are found to be in violation of MLB rules and regulations or contrary to information provided when owners approved the Guggenheim bidding group.
Gross, however, said all requirements of the bankruptcy process and settlement agreement between the Dodgers and MLB were fully met, and any further disputes would be resolved post-confirmation.
Specifically, MLB expressed concern about the control of the Dodger Stadium parking lots.
"We don't think it's fair to put the league in the position of having documents jammed down it and the ability to perform its job to the 29 other teams be compromised," MLB lawyer Thomas Luria said, asking for a three-day window to review documents it has not yet received. "We may have a problem with this deal closing."
Gross admitted he was was blindsided by the late dispute.
"I had no idea," he said. "I thought this would be a celebratory-type occasion."
MLB attorneys also voiced concern over the continued participation of mediator, and retired judge, Joseph Farnan, who has resolved numerous conflicts throughout the bankruptcy.
Gross again sided with the Dodgers, saying Farnan's jurisdiction would remain intact regarding the settlement agreement, but not baseball business matters outside the agreement.
Although the auction process for the sale was dictated by an agreement between McCourt and MLB, Luria charged that the sale was executed and announced in violation of league rules because MLB did not sign off on the specific deal.
"As exciting as it was to see the price come in," he said, "we still have 29 other owners and we're unable to do what the other owners expect us to do."
The deal includes a joint venture between Guggenheim Baseball Management and McCourt for the Dodger Stadium parking lots and surrounding property. The cost to Guggenheim for 50 percent interest in those properties is $150 million. The lease for the parking lot was extended from 25 to 99 years through the joint venture.
Dodgers attorneys said MLB was trying to circumvent the sale by reaching beyond the scope of the agreement it struck to have the club sold. That agreement required McCourt to sell the team and the stadium, but not the land surrounding the ballpark.
Gross said if the club and MLB could not resolve the parking lot issue, he -- and not the mediator -- would. But he would not delay confirmation because of it.
A document was submitted earlier to the court outlining control of the parking lots, but the Dodgers had requested it be kept under seal. The Los Angeles Times objected to sealing the document, and the Dodgers responded by withdrawing it Friday.
Gross overruled the Times' objection and allowed the document to be withdrawn. Dodgers attorney Bruce Bennett said in court that the 52-page document is still being revised but will become part of the public record when it is completed.
"It's not a document that will be kept secret for very long, but we'd like to keep it secret until it's finalized," Bennett said.
Gross also granted an objection by the Dodgers to an attempt by Jamie McCourt to put in a creditor claim for her $131 million divorce settlement with former husband Frank McCourt.
Only various Dodgers business entities are subject to the bankruptcy proceedings, not Frank McCourt personally. Jamie McCourt has been assured by McCourt's attorneys through court filings that she will be paid by Apr. 30, the date the divorce agreement calls for and the date by which the Dodgers sale must close. Dodgers attorney Sidney Levinson said Friday the sale will close "prior to April 30."
One obstacle to Gross' approval was cleared in a morning hearing when FOX Sports withdrew its objection to the sale because the new owners pledged that Time Warner, a FOX competitor, was not a partner or investor of the purchasing group and had no agreement with the purchaser for a new Dodgers television contract. FOX holds Dodgers cable rights through the 2013 season.
Bennett opened his statement to the judge by alluding to the Dodgers' 6-1 record through Thursday night.
"It is important to note," he said, "a team that was said to be neglected and starved for talent has the best record in baseball.
"The debtors owe thanks to the fans who stuck with the Dodgers, manager Don Mattingly and the players who refused to be distracted."
Ken Gurnick is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.