Monday, November 16, 2009

A few notes.

So something pretty neat happened this morning: I got my grubby little paws on hundreds of pages of Frank's filings.* This set of documents includes some of the Dodgers' attempts to be a party to the litigation--which Commissioner Gordon rejected. This e-stack of legalese also provides an unbelievably detailed account of the history of the post-nup. Now, as you all have surely figured out by this point, I can't get through four pages of documents in less than 2000 words. What to do with this many pages...well, I can assure you we won't be out of things to talk about any time soon.

*I intend to have the link up soon. Have to take care of a couple things first.

Real life intervened today, so a thorough parsing of the filings will have to wait. For now, I offer a couple notes on the viability of the post-nup. One of Jamie's anticipated defenses to the documents is that they should be unenforceable because she did not consult with separate, independent counsel before signing them. Her argument will point the court toward caselaw suggesting that the document was of such importance--and involved so much money--that an unrepresented party might be at such a disadvantage that the transaction cannot be upheld. Frank, of course, will counter by reminding the court that Jamie is a lawyer and should be presumed to know when she needs outside help.

Frank says that Silverstein did encourage the McCourts to retain their own attorneys, but did not believe the failure to do so would fatally undermine the post-nup. A few years after the execution of the agreement, the couple sought legal advice about the possibility of rescinding the document. Frank claims that the couple's estate planning attorney concluded that the post-nup was "sufficient to accomplish [Jamie's] goals" in dividing the assets.

A few other nuggets from the docs:
  • Frank claims that Jamie was "secretly" consulting with divorce lawyers at the time she tried to get Frank to consent to returning the Dodgers to their community property.
  • Frank's lawyers also imply that what spurred Jamie into all this drama might have been the crash of her assets' values (real estate) juxtaposed with the dramatic increase in the worth of the club. 
  • My fantastic (literal definition) attempt to undermine the post-nup via the Uniform Fraudulent Transfer Act might have been even less plausible than I thought. Apparently there's some caselaw out there which suggests that if the post-nup was executed before the couple moved from Massachusetts to California, the agreement might not count as a "transfer" anyway--Massachusetts is not a community property state. I think this issue might be close, as the post-nup had the effect of a transfer. But again, an attack on the agreement would require a creditor to bring a claim, and that's only one of many hurdles. 
It's very easy to look at this from the outside and view the McCourts as works of fiction. Because of their frequent inability to understand the simplest principles of public relations, they have nearly become satires of themselves. Be it Jamie's "face of the Dodgers" statement and pool sufficiency requirements--her nickname in an e-mail to Frank is "Swimmer"--or Frank's confusing P.R. gaffes and generally poor fit in Southern California, it's awfully tempting to evaluate this situation like a serial TV show. What will next week bring?

The "human element" has come under attack in baseball circles recently in the context of umpiring--and rightly so. But as I delve through this mountain of legal documents detailing the stunning immolation of the McCourt marriage, I am sometimes struck by just how human these folks are. Whatever you believe of the motives behind the McCourts' actions--genuine, manipulative, or just simply aloof--well, all of the possibilities depress me.

We'll talk throughout the week about the nitty gritty of this newest store of information.

1 comment:

  1. I don't buy Frank's camp argument that the Dodgers increased in value. Baseball is kind of renown in manipulating numbers, for figures like attendance, market share and overall local market power. Case in point is the Milwaukee Brewers. When the Brewers were sold to former TCW broker Mark Attanasio, they found the books were ridiculous, with the team just leveraged to max..

    Frank McCourt is still paying off the loans from his 2004 purchase, his son is technically in charge of marketing, The Dodgers get around $180 million a year, $100 million go to player payroll, the $60-70 million goes probably to a bunch overhead, besides keeping the banks happy with the commercial paper..

    The true value of the team is how much financing a financial group can managed to take over the team. The 2009 Forbes valuation has some interesting tidbits, but it way overinflates the Dodgers's worth.

    However, I think Frank has a point. Jamie is the bigger culprit in being underwater with her real estate purchases at premium mortgages. While the Dodgers even in bad economic times still get a steady revenue. Jamie would be more desperate in wanting a post nup, so she could secure more loans using the Dodgers assets as collateral.

    On the PR side, If both parties want to stay in Southern California after the divorce, they need to ditch the take no prisoner lawyers, and go for a more corporate and old school firm like O'Melveny & Myers than used Bert Fields, who is lucky he isn't prison. Stop with fighting this with PR firms. Find a way to settle, stabilize the assets, and move on. The Westside of LA may do it this way, but LA and Southern California is made up of many enclaves, and they need to do this more Pasadena than Holmby Hills.