465 B.R. 18
D. Del.2011Background
- Dodgers bankruptcy cases involve LAD and related entities filed under Chapter 11 in Delaware; five debtors listed.
- MLB settlement requires sale of the Team with all media rights to a Buyer by 2012; Buyer decides telecast rights terms.
- Fox holds exclusive right to produce and telecast Dodgers games under a long-running Telecast Rights Agreement with LAD.
- Current Telecast Agreement includes exclusive negotiating period (no-shop) and right of first refusal for future telecast rights after 2013.
- Debtors sought Amended Marketing Procedures to accelerate negotiations with third parties for future telecast rights, subject to MLB and buyer approval.
- Bankruptcy Court ruled in LAD’s favor, invalidating the no-shop provision as applied to the Debtors and approving amended procedures; Fox appeals stay denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appeal is properly interlocutory jurisdictional review | Fox asserts interlocutory appeal jurisdiction. | Debtors contend lack of interlocutory review or finality. | Court has interlocutory jurisdiction; reviews no-shop enforceability. |
| Whether no-shop provision is enforceable in bankruptcy | No-shop is enforceable against a bankruptcy entity. | Bankruptcy Court held no-shop unenforceable to maximize estate value. | Appellate likelihood of reversal; no-shop likely enforceable. |
| Whether findings that marketing future telecast rights is needed to pay creditors are clearly erroneous | Coleman’s testimony not supporting necessity; marketing not required to pay all creditors. | Bankruptcy Court relied on expert views supporting separate marketing. | Court finds likely erroneous; marketing not necessary to pay creditors. |
| Whether marketing future telecast rights is necessary to maximize value | Marketing rights now would maximize sale value; increases competition. | Marketing later could yield higher value; accelerated procedures not needed. | Court finds likely erroneous; proceeding not necessary to maximize value. |
| Irreparable harm and public interest in granting stay | Fox would suffer irreparable harm and public interest favors enforcing contract. | Debtors argue stay would hinder estate and timing. | Stay granted; irreparable harm shown and public interest favors stay. |
Key Cases Cited
- In re Marvel Entm’t Grp., Inc., 209 B.R. 832 (D.Del. 1997) (interlocutory review in bankruptcy context; standards for leave to appeal)
- In re Finova Grp., Inc., 2007 WL 3238764 (D.Del. 2007) (four-factor stay analysis; though cited with WL, included for context)
- Raleigh v. Illinois Dep’t of Revenue, 530 U.S. 15 (U.S. 2000) (state-law governs substance in bankruptcy; federal protecting rights)
- Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir. 1974) (controlling-law standard for finality/interlocutory review in bankruptcy)
- In re Gencarelli, 501 F.3d 1 (1st Cir. 2007) (enforceability of contractual obligations under non-bankruptcy law)
- Jewel Cos. v. Pay Less Drug Stores Nw., Inc., 741 F.2d 1555 (9th Cir. 1984) (California law tolerance of no-shop provisions)
- In re Morristown & Erie R.R. Co., 885 F.2d 98 (3d Cir. 1989) (court cannot rewrite contract terms in bankruptcy)
- Big Rivers Elec. Corp., 233 B.R. 739 (W.D. Ky. 1998) (no-shop provision context; not binding on Third Circuit)