Diamond Sports Sues Sinclair and Bally's Corporation

[powergate92]

Things with Diamond Sports bankruptcy get more interesting everyday. Diamond Sports filed a lawsuit today with the bankruptcy court against Sinclair, Bally's Corporation, and related parties for fraudulent transfer of money and property.

 

[powergate92]

Some more details on this lawsuit.

Bally Sports Bankruptcy Gets Bloodier: Secondary Creditors File Suit Against Sinclair and JP Morgan, Try to Claw Back $1 Billion Preferred Equity Repayment

Diamond's largely stiffed secondary creditors are asking the bankruptcy court why they've been left holding the bag while JP Morgan was made whole

www.nexttv.com

 

[powergate92]

Today, Diamond Sports aka Bally Sports filed a 128 page redacted copy of their lawsuit against Sinclair and Bally's Corporation in the Bankruptcy Court. I included screenshots of the table of contents here. Haven't had time to read through it yet. Waiting for a news article to come out summarizing it which I will post here later when that happens.

 

[powergate92]

And here are a few news reports summarizing it.

Sinclair 'Milked' Bally Sports Subsidiary Out of More Than $1.5 Billion, Diamond Sports Group Suit Says

Also, a source close to Diamond's secondary creditors tells Next TV he believes the bankrupt subsidiary will emerge from restructuring intact

www.nexttv.com

UPDATE 1-Sports broadcaster sues parent Sinclair, alleging $1.5 billion fraud

Bankrupt Diamond Sports Group has sued its parent company Sinclair Broadcast Group for fraudulently withdrawing as much as $1.5 billion from the regional sports business, according to a lawsuit made public on Wednesday. Diamond Sports, which broadcasts nearly half of NBA, NHL and MLB local...

finance.yahoo.com

Sinclair accused of driving regional-sports subsidiary into bankruptcy

Sinclair Broadcast Group Inc. wrongfully drained at least $1.5 billion from its regional-sports-network subsidiary in the years leading up to its bankruptcy,...

www.marketwatch.com

Also, one thing I'm surprised they don't talk about is the Bally's part of the lawsuit.

 

[salemjedi54]

So basically Sinclair got into the RSN business to get some of that sports betting cash for their balance sheet and not Diamond. That's why they quickly spun off Diamond into a subsidiary. Sinclair knew they were going to bankrupt DSG.

 

[powergate92]

They did a classic move that Private Equity Firms do in buying a company, loading it up with debt that the company they are buying is responsible for and not them, then taking as much money as they possibly can out of that company over the course of 3 - 5 years until it goes bankrupt, and then leave creditors to figure out what to do with the now bankrupt company.

 

[powergate92]

In response to Diamond's lawsuit, Sinclair has filed a motion asking the court to compel assumption or rejection of their Management Services Agreement that is at the center of the lawsuit. Hearing is set for October 2nd. Also interesting is Sinclair believes "Based on Diamond’s own statements at the August 11 status conference, however, emergence—let alone the filing of a chapter 11 plan—is nowhere in sight."

Bally Sports Fight Gets Even Nastier: Sinclair Tells Its Bankrupt Diamond Subsidiary, Either Pay Us $140 Million For Our Management Services Or Don't Use Them Anymore

The acrimony is getting intense between Sinclair and the subsidiary it set up four years ago to manage its Bally Sports regional channels

www.nexttv.com

Sinclair Responds To $1.5B Fraud Claim Amid DSG Turmoil

Sinclair Inc.’s full response to Diamond Sports Group’s recent $1.5 billion fraud claim hasn’t been made public — but Sinclair believes it shouldn’t have to help fund its own subsidiary’s legal claim against it.

frontofficesports.com