A few weeks ago, we wrote that the baseball Dodgers were filing for bankruptcy protection. Almost immediately after the team filed for bankruptcy, attorneys representing team owner Frank McCourt were in court facing off with attorneys for Major League Baseball.

They were arguing about whether the team could accept a set of loans from JP Morgan Chase in order to keep the team running during the Chapter 11 bankruptcy. Major League Baseball opposed the JP Morgan Chase loans, which would come with an interest rate of 10 percent, arguing that the loans were not in the best interest of the team. At the end of June, Bankruptcy Judge Kevin Gross decided that the Dodgers could accept an emergency loan worth $60 million from JP Morgan Chase. JP Morgan Chase was prepared to give the Dodgers an additional loan worth $90 million, and Judge Gross set a hearing to decide if that loan could go forward on July 20. After that hearing, Judge Gross put the brakes on the loan.

Last week, Judge Gross noted the fact that Major League Baseball offered to loan the Dodgers the money at a lower rate of 7 percent. Judge Gross found that MLB's plan demonstrated a "substantial economic superiority" to the loan suggested by McCourt. In addition, Judge Gross said he would reconsider his previous ruling regarding the $60 million loan.

Analysts believe that this ruling will give Major League Baseball substantially more power in the bankruptcy case, as the league will be able to assert its rights as a creditor.

Source: CNN, "Bankruptcy judge rejects L.A. Dodgers' refinancing plan," 22 July 2011