1. Yes. A breach like this would most likely have allowed termination. My guess, however, is that, absent being able to use chapter 11 to retain the contract, Comcast would have found some other way to keep things going and fund the payments while keeping the rights. It is clear that Comcast doesn't want to lose these rights. 2. Yes, I expect the chapter 11 would resolve any such issues. What essentially the proponents of the chapter 11 process want to happen, I think, will be that CSNH is going to be out on the auction block and sold to the highest bidder. And after that, they'll use the proceed to pay the debts before splitting whatever is left over, if any, among the equity holders-- Astros, Comcast and Rockers-- in proportion of their % equity interest. This can happen via a sale or via plan(s) of reorganization, but the difference is mainly a legal one while the economic substance will be essentially an auction either way.
Judge Isgur said they could not terminate right now in the midst of the Chapter 11. The Astros clearly had the contractual right to terminate and were going to exercise it. It was for that reason that Comcast filed the involuntary petition at the last minute.
They were not asked just to look for a "good deal" for carriage, but rather one that the Astros would accept to resolve the entire mess and avoid litigation.
I knew this was over your head...Let me get this on a level you may understand better Comcast say me no money me no pay Crane say me no likey Crane say me go with me toys end of month you no pay me right before end of month Comcast say me **** blockey you Jim Crane Judge Isgur say **** block successful
Agreed. BTW, a good number of chapter 11 cases are filed for this very reason: The debtor, who is insolvent, cannot make payment due under a contract but does not want to see it terminated. So, they file for chapter 11 and use the automatic stay to restructure the company and its finances so that it can keep a key contract and operate successfully as reorganized. There is quite a bit of law on whether a contract is merely in breach or has actually been terminated (and can no longer be assumed) at the time the chapter 11 is filed.
More like this... CSN fails to pay the Astros for three months. Crane says then I am going to bolt like the contract says I can. Comcast says holy ****...better run to the bankruptcy court. Things look bad at the initial hearing and Comcast says holy ****...better play nice with Les. Isgur then says there may be a profitable solution to be had and we are going to give it a go in Chapter 11. What you ignore is that they will either find a profitable solution or the network will be liquidated. It is entirely possible that reorganization fails and the network folds. If they have to liquidate, it will be the same result had the bankruptcy never been filed, only all parties will have incurred a lot more expense and a lot of time will have been wasted. Nevermind all that...you got what you wanted. Yay for you.
Thanks. But if it does end up in an auction, we get back to whether or not the rights would be re-assignable to a 3rd party (which is highly unlikely without even further litigation, correct?). Do you agree that if this all ends up with the Astros simply getting the agreement terminated, this could have all been a colossal waste of time, and it would have been easier/faster/cheaper to just allow the Astros to get out of the deal to begin with when they weren't paid?
Fixed it for you... You didn't get what you wanted which was the Astros to turn law on it's head using guerilla warfare litigation tactics... Again...you have to know better than to let your fandom cloud your judgement.
Do seriously not understand the court doesn't rule on easier/faster/cheaper? They rule on the law..... Jeezus Christ man.
I'm not asking what the court is ruling on... I'm talking about the end result now vs. what could have happened before any litigation. If the end result is the Astros getting back their media rights after a buyout, an auction, or after its proven that they're not re-assignable... after years of litigation... what the hell is the point of all of it if the end result is exactly the same?
-The assignability issue (and issues related to it, see below) is going to come up and will be resolved. But like I said, once the bankruptcy court makes its decision, a sale of assets or plan of reorganization can proceed while appeals are pending unless the courts grant a stay on the effectiveness of the bankruptcy court's order. So, the "auction" may not have to wait that long to happen. - Significantly, there is also a related issue as to whether a chapter 11 debtor can "assume" and keep a contract if the debtor does not actually "assign" the contract (by selling the debtor's contractual rights to a third party). This may becomes important if the proponents of the chapter 11 case chooses to go with the route of reorganizing via the confirmation of a plan of reorganization, which technically may not involve an assignment of contracts, as oppose to an asset sale, which would have to involve an assignment. The relevant legal reality here is that, according to what I read, under 5th Circuit law, even if a contract cannot be assigned, it can be assumed as long as the debtor doesn't actually move to assign it (the "actual test" is what courts call it). So, if the parties go with the plan of reorganization without an actual asset sale, maybe a reorganization can be done even if courts decide that media rights cannot be "assigned." This may be weird technical stuff to non-lawyers, but it does appear that the Astros' odds in fighting a reorganization don't look too good at this time.
Thanks again. What if MLB decides to get involved to protect their property from being sold off at something that would not be in the best interest of the league (or future rights fees disputes)?
They can file briefs and make legal arguments and the judge will rule based on his best interpretation of the law and the contract. Maybe I am missing something, but not sure there is a whole lot more that the MLB can do. I mean, are they going to refuse to let the other teams play against the Astros if the media rights contracts are assumed or assigned?
The Astros media rights are ultimately the property of MLB... along with the agreement that teams must contribute a % of all rights fees to revenue sharing. They're already subsidizing teams like the Nationals who have a crappy RSN agreement. I'm presuming nothing can get re-assigned or assumed at the detriment of the club, and re-broadcasted without the expressed written consent of MLB.
Absolutely. In this case, I do not believe that the termination had been completed prior to the filing. The difference between this case and the 11s filed that you referenced is the involuntary nature of the filing.
No...I had it right the first time. Also note that Hughes hasn't ruled on anything yet. He has laid out what he expects from the litigants, but he has far from ruled on the merits of the appeal.
I don't see the relevance. Pretty much every contract is loaded with anti-assignment provisions. In general, anti-assignment contractual clauses are not enforceable under the Bankruptcy Code even if they are enforceable outside of bankruptcy under regular contract law. There are some exceptions. The issue is how the Bankruptcy Code treats this particular type of contract (exclusive copyright license, I think) and whether there is something special about this contract that fall into one of these exceptions.
It is also important whether the Copyright Act speaks to this issue. The judge would be charged with enforcing that law in addition to the Bankruptcy Code.
