Everybody will be paid off once the team is sold. The Chapter 11 reorganization plan is set for court approval on April 13. From the LAT:
The Dodgers say they intend to exit bankruptcy by April 30, the same day by which outgoing owner Frank McCourt has to satisfy two obligations: (1) close the sale of the team, under his agreement with Major League Baseball; (2) pay his ex-wife Jamie $131 million, under his divorce settlement. In addition to the $573 million in debt and $131-million divorce settlement, Frank McCourt's attorneys have said a sale could result in up to $200 million in taxes. That would put McCourt's total obligations at up to $904 million, not counting any income tax penalties or liability to [Bryan] Stow's family.
By the way, Chapter7.com has an interesting graphic on the history of sports franchises going bankrupt. Here's the roster:
--Seattle Pilots, 1970: The Seattle Pilots declared bankruptcy to counteract an injunction by the state of Washington that sought to prevent them from moving to Milwaukee and becoming the Brewers.
--Pittsburgh Penguins, 1975, 1998: In 1998, to keep their season going, many Penguins players deferred their salaries. Star Mario Lemeiux was owed so much that he became a partial owner.
--Cleveland Barons, 1978
--Baltimore Orioles, 1993
--Los Angeles Kings, 1995
--Ottawa Senators, 2003
--Buffalo Sabres, 2003: The Sabres declared bankruptcy shortly after their owner was convicted of fraud and sentenced to 15 years in prison.
--Phoenix Coyotes, 2009
--Texas Rangers, 2010