How often do your two favorite subjects come together? Very rarely do mine: baseball and Delaware law. You may know what I am referring to when I say that, but in case you are not a sports fan, you may not know that the Los Angeles Dodgers, one of baseball’s more storied franchises, filed for Chapter 11 bankruptcy protection in a Delaware court this summer.
According to the bankruptcy petition, Los Angeles Dodgers Holding Company LLC, a Delaware company headed by Frank McCourt, is currently in financial hardship and carrying as much as $500 million in liabilities; thus it is unable to fund its current operations. "What Small-Business Owners Can Learn from the Dodgers' Financial Woes," an article published on entrepreneur.com, outlines the L.A. Dodgers' financial problems. Below is an excerpt.
A Boston real-estate developer Frank McCourt purchased the Los Angeles Dodgers in 2004 for $430 million. In a recent article from Jason Fell from Entrepreneur.com he said, “Despite the large size of the organization, the financial downfall of this storied baseball franchise can offer a number of important lessons for small-business Owners.
A Los Angeles-based bankruptcy attorney Leon D. Bayer, said “If this can happen to the Dodgers, it can happen to a small business.”
Bayer went on in the article to offer three big lessons small-business owners can learn from the Dodgers bankruptcy filing:
What lesson can we all take away from this? Well, there are many, but the biggest one is that Delaware protects your personal assets in bankruptcy better than other jurisdictions. I will keep you posted on how it works out for the Los Angeles Dodgers.