OT: Dodgers bounce payroll checks
You know things are pretty bad when you are bouncing checks written to your employees. This is pretty embarassing:
The Los Angeles Dodgers -- who recently filed for Chapter 11 bankruptcy protection -- issued payroll checks to some "game day staff members" that bounced, according to TMZ.com. The website actually obtained a check for $497.54 that shows it was returned to the employee by the bank and was stamped with "refer to maker," which means there were insufficient funds in the Dodgers' account.
http://www.cbssports.com/#!/mcc/blogs/entry/22297882/30362207
But the players checks all cleared, right?
We may be hearing about those checks bouncing next.
...these millionaires whining about lockouts and such. I agree, they do have inequalities that need to be fixed. But compared to most of us who survive on much less, and have much less power to bargain and strike, the whining is so over the top.
Not to mention, if you make a million or so a year, you would think you have a rainy day fund.
The Dodgers, specifically, are a train wreck that will get worse before it gets better.
What the hell is that? Hold on I have to go feed my pet white tiger.
I keep my rainy day fund flush with cash. Then whenever I hit the clubs, I can "make it rain" whenever I want.
I assume the fund consists of primarily $1 bills......
How do you think I am supposed to pay for my posse and my 11 SUV's?
"Sure, we make a lot of money but we also spend a lot of money." Unreal.
But, you have to keep your values in order, Mgrow.
What is more important, giving a multi-millionaire money to supprt his posse or giving a working stiff enough to feed the kids?
Ask any player and he'll tell you.
Those multi-millionaires are the product, if you don't pay the players you have nothing to sell. No one gets paid then. Do you think that they would pay the working stiff more if they paid the players less? If they paid the players less the owners of the Dodgers would have just had more money to squander away. It is the owners fault they are in this position not the teams. Though an old Manny, Really?
Yes, they are the product.
But it didn't used to be that every conceivable revenue source had to be maxed out in order to increase the players already gigantic salaries. It has become nothing but a business and has become all about them.
It used to be that you would tune into a game and between innings, Ernie or Paul orAl or George would talk, about the team, about baseball, maybe even the weather. Now sometimes you miss the beginning of innings so that they can fit in one more commercial and thereby squeeze out a little more revenue just to turn around and give it to the already unbelievably rich players. Much has been lost due to this insatiable greed.
That they would miss payroll with people making hundreds and not with people making millions is just symptomatic of this greed.
/rant over.
Let me correct myself.
An enjoyable time watching baseball should be the product, not the multi-millionaire players.
IT doesn't help that the owner treated the team as his personal ATM though.
I have a friend who works for the Dodgers and he was telling me how the McCourts have used the Dodgers as their own personal piggy bank. Jamie wanted a pool and their house didn't have one, so they bought the house next door. Even after all of this, rather than staying in one of their four multimillion dollar houses, Frank is staying in a hotel suite for 30K a month. These people are just stupid.
I don't have a problem with owners taking money out of a team through profits, but to just take out cash to the point of insolvency? I'm just shaking my head. McCourt bid on the Sox back in the day and lost. I just feel fortunate that he did not buy the Sox.
I guess that depends on whether you're a Sox fan, Brown.
(BTW: which Sox?)
Red.
Not exactly sure about how much he bid, but he was a finalist.
its sad to see how something that means so much to so many people can get turned totally upside down by something as petty as this. see also: mets.
As a commercial bankruptcy attorney, I am stunned that large debtor with obvious reorgnanization potential would allow this to happen. In the turnaround/reoganization world, the two most important things out of the gate are cash and payroll. Missing payroll is usually the death knell for a company; the Dodgers probably can survive this because of their mystique, but what a black eye.
A chapter 11 debtor is free to pay all payroll (or other legit expenses) after they file (postpetition). Of course, they have to have cash or financing and I think that is where the battle lies in this case. McCourt wanted to take some ridiculously expensive loan. MLB stepped in and objected and offered a much cheaper loan to keep the Dodgers afloat (7 percent instead of 10 percent; no fees instead of a boatload of fees). McCourt apparently is still in control and is trying to show -- in a passive/aggressive manner -- how MLB is screwing up his company, when in fact he is the one doing all the screwing up. I suspect MLB will file a motion soon asking for the court to appoint a trustee to manage this mess.
Prepetition payroll (i.e. for work done before the bankruptyc filing, but not yet paid) technically can't be paid immediately. However, in any operating chapter 11 case I have ever seen, the attorneys file a series of "first day motions" that include one for authority to pay all current payroll, whether pre or postpetition. Those motions are always granted. My guess is that the problem here is access to financing.
Hey, we're colleagues! I actually worked for one of the firms that represents the Dodgers in their bankruptcy case. I presume that the bounced checks was a simple logistical issue with the cash being funded by the DIP lenders not having hit the proper operating account. All of the first-day motions were filed (they are public record on the bankruptcy court PACER website) and the hearing was held a few days ago. It looks bad to bounce these checks for sure, but I'm almost positive it was a simple mix-up and not indicative of the Dodgers' inability to meet its debts as they come due in the bankruptcy case. This will truly be a reorganization (see Rangers) and the McCourts are not running the show - the MLB is the ultimate authority in these cases.
Cool. At the risk of cluttering the board, I practice in Cleveland. Are you in L.A., Delaware, or elsewhere? Let's figure out how we can connect.
I started in Delaware after law school and now work in-house in North Carolina.
Nice to see some deeper information on this issue. As a Dodgers fan this whole saga has been killing me. I'm still in awe that baseball owners would move heaven and earth to block Mark Cuban, but they let this clown buy one of baseball's premier franchises.
Most people who make tons of money live paycheck to paycheck just like most regular folks. They just have nicer things and more money moving...
As described in Six Degrees of Separation: Hand to mouth on a higher plateau.
doesn't always mean insufficient funds. Now, given the situation they're in that's certainly a logical conclusion.
Either way, that's embarrassing.
Pre-filing checks bouncing is a rule, not an exception, in bankruptcy. There may well be sufficient cash to pay them, but the debtor is not allowed to pay them without court approval.
Filing Chapter 11 results in an automatic stay against creditors, including accounts payable and payroll checks outstanding. Bank accounts are basically frozen at filing.
The bankruptcy court has to authorize assumption of prepetition liabilities and must authorize the debtor retaining use of its existing bank accounts (cash collateral for secured lenders).
Only after that happens can prepetition obligations be assumed, including unpaid wages up to approx $11,500 per employee, and such assumption is subject to objection by other creditors.
Post-petition payroll will be paid, as will post-petition liabilities, using funds available under the Highbridge (JPMorgan affiliate) debtor in possession credit facility.