Sinclair Broadcast Group Inc. told a court it wants a faster breakup from its bankrupt sports broadcasting unit after the company was accused of draining more than $1.5 billion from the subsidiary, Bloomberg News reported. Sinclair on Monday provided a defense against allegations it wrongly extracted substantial sums from its Diamond Sports Group subsidiary before the unit filed bankruptcy earlier this year. Sinclair said it agreed to waive millions of dollars in management fees and provided other financial assistance in hopes restructuring Diamond’s balance sheet. But instead of continuing to work with its parent company on a plan to get the business out of bankruptcy, Sinclair told a Texas bankruptcy judge that Diamond and some of its creditors “pivoted to an all-out ‘shoot-first’ litigation war on Sinclair.” Diamond accused Sinclair of charging excessive fees under a management services agreement that costs more than $100 million a year. In response, Sinclair said Diamond should terminate the deal if it believes it’s too expensive, but claimed the subsidiary is dragging its feet because it wants benefits it gets under the deal while paying its parent company a significantly lower rate in bankruptcy. On Monday, Sinclair demanded Diamond make a choice: either accept the management agreement and drop some of the allegations in its complaint or end the deal with its parent company. Scuttling the agreement would mean Sinclair would no longer be forced to subsidize Diamond’s business or litigation against the parent company, Sinclair said.
