NEW YORK, Aug 16 (Reuters) – Bankrupt Diamond Sports Group has sued its mother or father firm Sinclair Broadcast Group (SBGI.O) for fraudulently withdrawing as a lot as $1.5 billion from the regional sports activities enterprise, in accordance with a lawsuit made public on Wednesday.

Diamond Sports, which broadcasts practically half of NBA, NHL and MLB native video games by means of its “Bally Sports” branded channels, stated that Sinclair started siphoning the corporate’s property away virtually instantly upon buying it in 2019. Sinclair’s actions defrauded Diamond and its collectors, as a result of Sinclair knew that Diamond was “careering toward bankruptcy” as a result of declining income from cable and satellite tv for pc tv subscriptions, in accordance with the lawsuit.

“Throughout this entire period of precipitous decline, Sinclair unrelentingly continued to carry out its plan to ‘milk’ Diamond for Sinclair’s own benefit and to extract whatever value it could salvage before Diamond’s inevitable bankruptcy,” Diamond wrote in a grievance filed in U.S. chapter courtroom in Houston, Texas.

Sinclair couldn’t instantly be reached for remark, however it stated final month that it was conscious that Diamond had filed a lawsuit underneath seal. Sinclair stated that Diamond’s claims have been with out benefit and that it could vigorously defend itself.

Sinclair acquired Diamond, which beforehand broadcast video games underneath the “Fox Sports” model, in a $10 billion deal that helped clear the best way for Disney’s acquisition of Twenty-First Century Fox Inc’s movie and tv property.

Diamond’s grievance alleges that Sinclair shortly used Diamond’s funds to repay a part of Sinclair’s prices in buying the corporate. Sinclair later collected “extortionate” administration charges from Diamond and pocketed many of the cash raised in a deal that rebranded Diamond’s channels as “Bally Sports,” in accordance with the grievance.

Diamond filed for bankruptcy in March, looking for to finalize a settlement with its lenders and renegotiate its MLB contracts. Diamond has stated it wants the appropriate to stream baseball video games on-line to make up for misplaced income from declining buyer cable subscriptions.

Our Standards: The Thomson Reuters Trust Principles.