Never said that any team should solely finance it. One team has repeatedly expressed possibly losing equity in exchange for Comcast funding the losses. That team seems ill prepared to be an owner in a start up TV station. What JJ posted was the opinion of an Astros Attorney and we know they haven't fared too well lately. You work in the legal end of this situation and I work in contracting. We both know that it's not about sentiment when it comes to this type of money. This went the route it did because Comcast had a better legal argument than did the Astros.
Comcast has changed request from CH. 11 Trustee to an examiner with expanded powers. Whether the Astros lawyers are good or not at their job is not relevant to this fact. The Astros are of the opinion that Comcast withdrew request because they became aware that an appointed trustee would cause the Astros to be able to re-acquire their media rights. Whether that opinion is correct or not, it is logical to assume the Astros don't fear a trustee based on this opinion. They may fear an examiner with expanded powers that for all intents and purposes is a trustee for this case. I will say that Comcast's delaying tactics by filing for involuntary bankruptcy in bad faith to create time for Rockets entities to become good faith creditors has out-maneuvered the Astros to this point.
I thought you did. I just wanted to be clear as I did a quick snippet from that link without much explanation. I have not found a quote from judge warning Comcast about trustee issue or if Comcast backed down from trustee request on their own.
The judge told them that he did not see merit in the request for a trustee, but if the attorneys thought they were good enough to make him change his mind, they were free to argue the motion. At that point, they dropped the request for a trustee.
I took a quick look at the Bankruptcy Code and did a google search and didn't find anything regarding how the appointment of a chapter trustee will automatically lead to contracts being deemed rejected. Not sure where that legal argument came from. I wonder if there is any case/statute citation in any of the briefs filed in this case. I don't recall ever coming across this argument in my practice-- admittedly, I haven't dealt with many chapter 11 cases have had trustees appointed or even sought to be appointed. The only case I recall this happening was an involuntary case filed by some bank creditors against a company that was doctoring its books. The company was fighting to have the involuntary case dismissed and the bank creditors asked for the appointment of an trustee or examiner to take over the debtor company on an interim basis until the court decides whether to put the company into bankruptcy. The idea there was that the debtor's management could not be trusted to run the business and it was going to take quite a while for the court to decide. Was the idea for this CSNH "trustee/examiner" thing to have someone take over CSNH while Judge Isgur was still deciding on the order for relief, which as now been granted?
I haven't heard of contracts being rejected upon the appointment of a trustee either. I guess that view is possible due to the copyright aspect of these contracts, but that is far from clear. My assumption is that Comcast wanted a trustee to negotiate carriage agreements over the objection of any of the partners. Once that option was off the table, and Comcast decided not to acquire the entire network...the case has gone off the rails. At this point, without DIP financing or a cash call, I don't see how this ends up anywhere other than liquidation.
If my memory serves correct, one of the court documents specified that chapter 11 trustee being appointed is written in media rights agreement as causing the contract to be terminated. I'm not a lawyer so I have no idea if the judge can override this provision of contract like he is doing with veto rights.
http://blogs.houstonpress.com/hairballs/2014/03/csh_houston_lynn_hughes.php The CSN Houston Bankruptcy Clown Show Just Keeps Clowning Away By John Royal Published Fri., Mar. 21 2014 at 8:00 AM Jim Crane, Les Alexander, and Robert Pick have been "invited to attend to informally discuss a resolution" to the CSN Houston bankruptcy matter on Friday, March 28. The invitation has been extended by Federal District Court Judge Lynn Hughes, the man overseeing the Astros appeal of CSN Houston's involuntary bankruptcy. The wording is polite, and an unsuspecting party might believe that attendance is not mandatory. It's an invitation after all. But the proper interpretation is that this is a command, and one doesn't ignore the commands of a federal judge, especially one as mercurial as Lynn Hughes. And there's one further thing, the gentleman are not allowed to bring the attorneys handling the court work. Judge Hughes has ordered them to appear without outside counsel. Each may bring along an aide to the meeting, but that aide cannot be outside counsel, and if one of them cannot attend, then he may "send a delegate who is not outside counsel in their stead -- only if the delegate has meaningful authority." Now you're probably wondering about a few things. Like who is Robert Pick -- he's a senior Vice President of Corporate Development for Comcast. But more importantly, you want to know just what this means in regards to CSN Houston and whether you will ever be able to get the damn channel on your cable/satellite package. So being one who has never dealt with Judge Hughes, I asked around of some my fellow lawyers who have tried cases before the judge. And the basic summation of their responses: this clown show is about to go to the next level of clown show clown-showiness. It's not really proper for a judge to request to meet with parties, but to then forbid the presence of their attorneys. But as I was told, Judge Hughes makes his own rules, and those rules don't necessarily match the proper legal rules -- the rules also tend, I'm told, to change from case to case. He also believes he's smarter than everybody else, especially attorneys, and he's absolutely convinced that he understands the case better than anybody else, including the parties who have been living the case for years. So here's my thoughts/guesses on what's going on. Hughes is calling all of them to his office, and he's going to give his thoughts on the case, probably along the lines that there's no way the Astros are going to win this appeal and that it's time for Crane to act like a grown-up and give up the appeal. He's also said in past hearings that he's not happy with the fraud lawsuit between Jim Crane and Drayton McLane/Comcast, so odds are the he'll try to strong-arm Crane into dismissing the suit or to request that it be put on hold until some time way in the future. Hughes doesn't suffer idiots well, I've been told, and if either of the parties dares to disagree, that could doom them to being on the wrong side of his rulings for as long as the case lasts. So Crane and Alexander and Pick are going to have to bite their tongues and not fight back. And the parties better know every single, minute detail of the bankruptcy and the agreements behind forming the network because Hughes will know everything (or think he does). I don't like that the parties can't bring their attorneys -- there's nothing forbidding them from bringing their in-house counsel, but in-house and outside counsel serve very different functions, and it's the outside counsel who will know every single detail of the litigation and the possible strategy moves. But the fact that Hughes wants these men and/or someone with authority to make binding decisions present seems to indicate that he thinks he can get this thing settled and out of his courtroom. But what's it all mean? I think it all means that Hughes is going to go all bad cop and try and get the network working. I believe he'll try to force changes to the operating agreements, primarily the unanimous consent provisions and that most-favored nation status bestowed on Comcast. He'll probably tell Crane he has to act as an owner to CSN Houston in the same manner in which he acts as owner of the Astros, and that he can't put the network interests behind the interests of the Astros. Comcast withdrew its offer to purchase the entire network earlier this week, but I think Hughes will try to force Comcast to make a legit attempt to buy out the Astros, and to make sure the Astros get what's owed. And I believe he will try to order the parties to accept any offer from Direct TV/AT&T that comes close to what Comcast is paying. But here's the deal. Nobody has to agree with anything. This is an informal meeting and the judge can't make them do anything. He might tell them how he plans to rule, but he can't make them settle, or come to terms, or make offers to buy each other out. Judges like to think they're the most powerful people on earth, but they're not. This is Jim Crane's life, his business, and he can do with this appeal whatever he chooses. He might make Judge Hughes mad, but that's a risk every person appearing before Judge Hughes takes, and if Crane doesn't like what he's hearing, then there's nothing that can force him, or Alexander or Comcast to take a deal. In the end, this might all turn out to be a good deal. Maybe everybody will see the light and come Opening Day, CSN Houston will suddenly appear on everybody's television. If not, everybody gets an idea of the judge's thinking, and gets a clue as to how the case will go. As a friend who practices before Judge Hughes told me, welcome to the Clown Show. But this is the Astros, Rockets, Comcast, and CSN Houston and this thing has been a Clown Show since October of 2012.
Basically just another "opinion" piece, no different than the opinions stated here... and I agree that while the judge may have "good intentions" by having this meeting, and plans on giving them all a "stern talking to"... he's right that the parties don't have to agree to anything. And thus prolongs the quagmire. To be honest, if the judge just went in there and said "what's the best possible solution for everybody? Buyout? Liquidation? more court/appeals?" , and if they somehow have a majority opinion on any of those, that's where he should try to steer this thing.
I still maintain that the only way for the network to stay afloat, and remove conflict of interest, is for Rockets/Astros agree to give full control to Comcast in exchange for removal of MFN clause. Then you get whatever you can from DirectTV and Uverse knowing it will only increase revenue (probably enough to turn a profit).
Another season of no Astros baseball on TV. Great. And, I'm not buying no Extra Innings package to see them unfortunately. Let the Clown Show continue... .
I can not imagine a judge asking the parties to come in for a meeting without their attorneys. I don't think I've ever heard of that before.
I've got CSN and have been disappointed in how few ST games they've shown this far - so you aren't missing much so far. Can't remember if in seasons past it was always this shallow on ST coverage.
