By Alex Dobuzinskis
LOS ANGELES (Reuters) - Los Angeles Dodgers owner Frank McCourt argued in court papers filed on Monday that taking a loan from Major League Baseball would be akin to a "deal with the devil."
The filing came in advance of a hearing set for Wednesday in federal bankruptcy court in Delaware, where McCourt's lawyers are expected to argue that they should be allowed to accept a loan from a hedge fund, Highbridge Capital Management, instead of the one offered by Major League Baseball.
Baseball Commissioner Bud Selig, who took over day-to-day control of the Dodgers in April amid what he said were concerns over the teams finances, has offered McCourt a loan that could save him millions of dollars in interest and fees.
McCourt, who has blamed Selig for sending the team into bankruptcy last month by rejecting a $3 billion cable TV deal, said in the filing that Selig's offer was a "pretext" for exerting more control over the franchise.
Attorneys for Selig's office, in their court filing, asked the judge to reject the Highbridge loan, arguing that it would come with a higher interest rate than the one offered by Major League Baseball.
The league's attorneys said MLB's "clearly superior" loan would save $10 million in loan fees.
They asked the court to deny approval of the Highbridge loan and sign off on the "clearly superior MLB" offer.
The court battle between McCourt and the league represents a potential conflict between the broad powers the league often exercises over its teams and the obligations and protections for debtors under U.S. bankruptcy law.
McCourt is seeking court approval for a $150 million loan from Highbridge, a unit of JPMorgan Chase & Co, to keep the Dodgers operating.
His attorneys said in their court papers that nothing in the bankruptcy code requires the Dodgers to accept the league's loan offer.
"To the contrary, it is clear that a debtor need not (and should not) be forced to borrow from a lender whose interests ultimately are detrimental to the interests of the debtor and its estate, and that it is well within a debtor's business judgment to decline such a 'deal with the devil,'" McCourt's attorneys said in the court papers.
McCourt is fighting with his ex-wife, Jamie, in divorce court in Los Angeles over her contention that she has an ownership stake in the team.
(Reporting by Alex Dobuzinskis: Editing by Dan Whitcomb)