Dodgers’ fate could rest in divorce case
Published 12:08 am Monday, August 30, 2010
LOS ANGELES (AP) — As the Los Angeles Dodgers cling to playoff hopes, a more important struggle for their future is taking place off the field over who owns the team.
Starting on Monday, attorneys for former Dodger CEO Jamie McCourt will try to convince Superior Court Judge Scott Gordon she’s entitled to a stake in the team that her estranged husband, Frank McCourt, says belongs solely to him.
The key question facing the judge during an 11-day divorce trial is the validity of a postnuptial marital agreement signed by the couple in March 2004, shortly after purchasing the Dodgers for about $430 million. The pact supposedly gives Frank McCourt the Dodgers, the stadium and the surrounding land, worth hundreds of millions of dollars, while Jamie McCourt receives a half-dozen luxurious homes.
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The battle is bound to give Dodgers players, fans and the front office a glimpse into what has been going on behind the scenes since the couple’s storybook romance soured into something more akin to ‘‘War of the Roses.’’
The McCourts married in 1979 after meeting at Georgetown University. He went into real estate, while she practiced family law and raised the couple’s now adult four sons. Jamie McCourt has said she gave her husband $1,000 to start his company.
Frank McCourt has been described in court papers as taking risky ventures for the potential of greater rewards, while his wife was more conservative and wanted to protect their assets from creditors after several of his ventures failed.
The two earned a fortune by snapping up property in the Boston area and turned their interest earlier this decade to buying a professional baseball team. After failing to acquire the Boston Red Sox and the team now known as the Los Angeles Angels of Anaheim they bought the Dodgers from News Corp. in a highly leveraged deal.
They were touted in a team press release as co-owners, although Major League Baseball rules dictate only one controlling interest. The storied franchise was bleeding money under the previous owner, according to court documents, but the McCourts helped make it profitable and the Dodgers went to the playoffs four out of the last six years.
Not all was well, however, in Dodgertown.
Frank McCourt unceremoniously booted his wife from the front office after the playoffs last year and accused her of having an affair with her bodyguard-driver, a former Dodgers employee. The McCourts also appeared to be spending beyond their means, traveling by private jet, staying at five-star resorts and making huge home improvements.
By his own admission, Frank McCourt has said the couple’s lifestyle had become out-of-control and unsustainable. In court filings by Jamie McCourt’s attorneys, they claim the couple took out more than $100 million from Dodger-related businesses.
Out of the public eye, the two were being briefed on the ramifications of the marital agreement they had signed in Massachusetts. Jamie McCourt’s attorneys have argued while she wanted the couple’s homes in her name, she would never have ceded control over the Dodgers or other assets she believed she shared with her husband.
‘‘It simply is not credible that she knowingly would have given up her rights to the Dodger assets under any circumstances,’’ her attorneys wrote in a recent filing.
Frank McCourt’s lawyers maintain his wife pushed for the marital agreement and they plan on calling more than a half-dozen witnesses who will say she had concerns about the risks associated with buying the Dodgers and wanted to protect her own nest egg.
Under California law, property is usually divided equally between divorcing couples, unless there is a valid agreement spelling out how assets should be distributed.
Gordon will have many factors to consider as he weighs whether to favor one side or order the sale of the Dodgers.
‘‘The judge is faced with a task that he may not want to undertake,’’ said Richard Banks, a law professor at Stanford University. ‘‘The parties almost always can make better decisions than the judge can.’’
Gordon has already awarded Jamie McCourt $225,000 a month in temporary support and ordered Frank McCourt to pay more than $400,000 a month for six homes and a condominium. To help satisfy that arrangement and an estimated $9 million in attorney fees for his wife, Frank McCourt recently sold a lot in Cabo San Lucas, Mexico for more than $5 million.
As recently as two weeks ago, Jamie McCourt’s attorneys said they found three signed copies of the marital agreement that list the Dodgers as community property. Frank McCourt’s lawyers say they have three signed versions that have the team as their client’s separate property. His attorneys said a typo was to blame for the three other copies.
Jamie McCourt’s legal team has suggested that three of the documents were ‘‘fraudulently altered’’ to give the Dodgers to her estranged husband.
‘‘Her name is not on any piece of paper when they bought the Dodgers. If she was a partner, she was the most silent partner in the world,’’ said Steve Susman, one of Frank McCourt’s attorneys.
While some legal experts believe all six copies will be entered into evidence, the foggier the picture for Gordon, the better the chances are for Jamie McCourt.
‘‘The confusion over the documents is going to weigh very strongly in Jamie’s favor,’’ said Los Angeles-based family law attorney Steve Mindel. ‘‘If it’s a close call, I think Judge Gordon will put aside the agreement.’’
The McCourts also have argued about the value of the Dodgers, the stadium and the land. Frank McCourt’s team puts it somewhere between $800 million and $900 million, while Jamie McCourt estimates the potential amount at more than $2 billion.
For Dodger fans, the fight is unsettling.
‘‘I think people are very distrustful of the McCourts,’’ said Josh Fisher, 24, a law school student at the University of Minnesota, who grew up in the Los Angeles area and created a website, dodgerdivorce.com. ‘‘Their lifestyle is perfectly acceptable to fans if the future outlook for the team was brighter than it is. All the success over the last three to four years have come at pretty dear cost through prospects and organizational stability.’’
Neither side seems willing to budge, although Susman said Frank McCourt has offered his wife an extremely generous amount of money. He refused to disclose the figure.
Jamie McCourt’s lawyers said she deserves a slice of the team she cherished so much.
‘‘It’s a deal that cries out for compromise. She’s not going to take zero and he’s not going to give her half,’’ attorney David Boies said.
Some observers think that the McCourts may reconsider once the trial begins and they see how Gordon weighs the evidence.
‘‘The most likely scenario would be to settle during trial but before the judge renders a decision,’’ Banks said. ‘‘The judge could come up with a ruling that either party doesn’t want.’’