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Diamond Sports Group LLC, the regional-sports broadcasting company, will face off today with Major League Baseball and four of its teams, which say that Diamond has been eating a “free lunch” in chapter 11 by broadcasting games without paying for the exclusive rights, WSJ Pro Bankruptcy reported. MLB and the clubs say that Diamond shouldn’t get to access its cash collateral in chapter 11 until it agrees to resume paying them for the rights to broadcast their games. The company hasn’t paid broadcast fees to the Texas Rangers, Arizona Diamondbacks, Cleveland Guardians and Minnesota Twins since entering chapter 11, court papers show. Diamond has argued it is being overcharged and should only have to pay the “reasonable value” of the broadcast rights it receives — not the original contract rate. Until the bankruptcy court determines the appropriate rate, Diamond says it shouldn’t have to make ongoing payments for those broadcast rights. The baseball clubs and MLB itself deny their contracts can be reformulated like that. Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston will consider Wednesday if Diamond must make its agreed-upon payments as a condition of continuing to broadcast games.

Celebrities who promoted FTX, including NFL quarterback Tom Brady and comedian Larry David, said an investor lawsuit seeking damages in the wake of the cryptocurrency exchange's collapse should be dismissed, Reuters reported. The proposed class action in Miami alleges that FTX yield-bearing accounts were unregistered securities that were unlawfully sold in the United States, which required the promoters to disclose the compensation they received. The lawsuit seeks damages from FTX founder Sam Bankman-Fried alongside several celebrities who promoted FTX including David, the creator of TV shows "Seinfeld" and "Curb Your Enthusiasm." It also seeks damages from a National Basketball Association team that promoted FTX, the Golden State Warriors. The celebrities and the Warriors said in court papers filed on Friday that they had never pitched the accounts at issue in the case and did not cause the investors' losses. They said that under the investors' theory, "actors in any brokerage ad would be liable for selling any security that an individual user later purchased using the brokerage's services." "That's nonsense," the celebrities said.

Canadian Pacific Railway Ltd. has emerged as an unlikely target for a few distressed-debt investors. It wasn’t because of the railroad operator’s creditworthiness, but rather because rising interest rates pummeled the value of some of its bonds in recent months ahead of its roughly $30 billion acquisition of U.S. rival Kansas City Southern, according to a WSJ Pro Bankruptcy commentary. Canadian Pacific sold bonds in December 2021 to finance the acquisition, including $2.4 billion in notes due 2031 and 2041, with coupons of 2.45% and 3%, respectively. Due to the rise in interest rates since then, some of those bonds have tumbled in value to between 70 and 80 cents on the dollar amid a broad selloff in high-grade fixed-income debt. Investors sensed opportunity in the beaten-down bonds. A bondholder group represented by the law firm Paul Hastings LLP has argued in recent weeks that Canadian Pacific is required to pay off the bonds at 101 cents on the dollar after triggering a redemption event baked into the bond indenture. Under the indenture, Canadian Pacific agreed to redeem the bonds if it failed to achieve a key regulatory approval for its purchase of Kansas City Southern by March 25. The relevant regulatory agency, the Surface Transportation Board, issued its ruling on March 15, clearing the way for the final stages of the merger to close. But the STB said it wouldn’t take effect before April 14.