Bankruptcy courts being courts of equity do add an additional wrinkle. If there are any of the petitioning creditors that provided services to CSN that have not been paid for and benefitted the channel (and thus, the partners), I do not think that the judge is going to find that the unpaid amounts are not debts. I just don't see the judge allowing such a thing to happen. Is that enough to turn the tide? I doubt it, but it is something to consider. To the extent that services were rendered, I strongly suspect that such amount will be held to be a valid debt.
I have actually done bankruptcy litigation, including involuntary ones, for 5 years, mostly in NY and Delaware. We will see how it plays out. If it is really cut and dry we'll see a quick dismissal when the hearing happens, which will be soon enough and we can stop litigating this motion on the internet. As for the debts: I wonder if the affiliate would really have done the work giving rise to these debts if it is so clear that they would not be paid. Have the response pleadings been filed by the petitioning creditors? One more thing to know: I am not sure about this particular judge, but bankruptcy courts tend to favor giving a company to reorganize and stay in business (preserving jobs and value of business and whatnot) as oppose to forcing it into blowing it up when they can. Here we CSN arguably being a company that may be able to survive with the bankruptcy powers (assumption of contracts, reorganization process breaking the deadlock, etc.) and at risk of losing a major contract (broadcasting of Astros) and failing if the case is dismissed. Also, the case was filed as an involuntary because the corporate deadlock did not allow a voluntary filing. I suspect whether the court will do what he can under the law to keep the case alive if the facts fit well enough and if the court thinks that the viability of a business and people's jobs are at stake.
What's the point of having the qualification of it being "not subject to a bona fide dispute" then? That's the whole idea. You can't have people/entities with contingent claims just throwing those they're making claims against into bankruptcy. No one is saying it's not a valid debt...if Comcast Partner hired them without the consent of the Astros or Rockets, then it's certainly a valid claim against Comcast Partner.
I'm not trying to have a penis-measuring competition with you. I've been involved in bankruptcy litigation. Represented creditors in contested claims right here in Houston and in Dallas. I did not sit first chair for those clients, as it was earlier in my career. My partner was first chair against a Dallas Cowboy player on behalf of a bank up in Dallas in a bankruptcy contested matter and I was involved in that. I cut my teeth representing banks in complex commercial litigation and workouts. I will readily admit, I've never been involved in an involuntary proceeding. I don't know that the affiliate ever really knew the particulars of the partnership agreement between the Astros/Rockets and Comcast Partner. I doubt seriously they did. And just because the Astros/Rockets didn't consent doesn't mean the debt isn't valid with respect to Comcast Partner who ordered the work be done without checking in with the Astros/Rockets first. But remember...it doesn't matter if the debt is valid or invalid. That's for another day. All the Court needs to dismiss the bankruptcy is a bona fide dispute regarding the debt. If there really is a partnership agreement that requires consent of all parties to create debts to affiliates....and there really wasn't that consent....I don't see how, AT THE VERY LEAST, that's not a bona fide dispute as to the debt. And if that's the case, then we only have 2 creditors remaining...not enough to sustain an involuntary proceeding. Take a look at the Astros motion if you get a chance. They cite to case law out of this court with a similar fact pattern...where partners use an involuntary to get circumvent a valid partnership agreement...and the case was dismissed on those grounds as being brought in bad faith. I haven't read the case yet...it's cited to in the motion. One other thing we haven't even discussed yet...the Astros are arguing their broadcast rights aren't assignable by a trustee. That the bankruptcy is a "road to nowhere" for that very reason. I have no idea if they're right or not. They're arguing the broadcast rights are a personal services agreement. I've never been in his Court, but Judge Isgur actually was my bankruptcy professor in law school. No-nonsense guy. A very smart guy.
never studied law, been involved in law, or even been in a courtroom. but I have to say, this thread has been both enlightening and interesting. thanks to you legal-type folks for sharing all of these thoughts. fascinating!
If the Astros walk, exactly what agreement would be reached..... The Astros are holding out because Crane has his payroll historically low and can currently afford to operate without the carriage deals. Jim Crane is holding out for top dollar and the non-comcast providers aren't paying it. I don't see how the Astros walking forces hands at Dish, U-Verse or others if Jim Crane continues to be a dick.
If the Astros walk, I'm assuming they walk with their partnership interest bought out...or some arrangement is reached so that CSN can see if it can make a go with just the Rockets. It's in no one's best interest for the Astros to continue to own a share of a television station that doesn't broadcast their product. If that happens, then there is no stalemate with respect to carriers. I have no idea if CSN can make it work with only the Rockets and Dynamo. Crane can't afford to operate this way. His franchise wasn't paid at all for the last 3 months of broadcasting. No one can go on that way for very long. It's why they were saying that they were going to walk from the broadcast agreement...that they were 3 days from walking when the bankruptcy was filed.
If they walk it separates them out of the equation and opens the door for the Rockets/Comcast or whatever the fallout turns out to be to negotiate a deal at a lower price than what the Astros are trying to force. Then it lets the Astros attempt to negotiate their own deal before their season starts.
Rockets / CSN Houston won't happen because it's not enough programming to support the channel. The Network would likely implode. If the Rockets went back to FSN, do Comcast customers have access to that channel? It would be ironic if Comcast customers were the ones who got shut out of coverage moving forward.
I think you're probably right. Aside from the Lakers and that gigantic TV market, I have a hard time imagining an NBA team being the flagship of an all sports channel, simply because there's only 82 nights of programming. I believe Comcast customers still get FSN.
I meant the Astros could continue to hold out, if CSNH wasn't using not paying and filing bankruptcy as a negotiating tactic to get the stalemate lifted. The Astros were able to hold out this past season because the money they were supposed to receive was sufficient to pay their debts.
The Astros had already informed CSN-H that they were walking away on Sept 30, which was why Comcast filed the bankruptcy to basically stop them. So assuming the bankruptcy is lifted, the Astros would presumably walk away at that point.
if the judge dismisses this, what happens to the debt. does the judge put them on a pay plan? they still owe money.
The debt is not in default and this suit has nothing to do with the debt. CSN-H has been paying the interest owed when it comes due. That would continue until CSN-H actually legitimately goes bankrupt or the debt is paid off.
it is ridiculous to keep saying the debt has nothing to do the suit. I don't understand why you keep saying. the judge is reviewing the debt. the lawyers have already explained to us in several posts. why would he review it if it has nothing to do with the suit?
BECAUSE THE DEBT IS NOT IN DEFAULT. The bankruptcy is not claiming that any of this debt is in default. Therefore, if the bankruptcy is dismissed, the debt will still not be in default. Therefore, nothing happens to the debt - it just continues along as it already was until it does goes into default (an actual bankruptcy) or it gets paid off. If the judge dismisses the case, there is no reason for him to do anything about the debt because there's nothing wrong with the debt.
Because it's not. The debt is peripheral to the filing. The debt is only relevant in the sense that it exists and allowed creditors to a try to file an involuntary bankruptcy, but no one is trying to figure out what to do with the debt. The issue at stake is who gets to make decisions about the future of CSN-H and the Astros' broadcasting rights and how that will be structured.
