Thursday, September 2, 2010

Midday update.

This would be a good time to talk about Larry Silverstein, the Boston lawyer who drafted the MPA and both Exhibit A's. In attempting to rehabilitate Frank on the stand, Steve Susman basically threw Silverstein and his firm under the bus. Frank, you'll recall, needs to prove that the California Exhibit A, which makes the Dodgers community property, was truly a minor clerical error.

Of course, this minor clerical error could be monstrously costly, to many folks involved. It might cost Frank the Dodgers. And it might cost Silverstein and his firm dearly, as well.

Silverstein really ought to be here for this litigation, as his role in the creation and execution of the Marital Property Agreement is integral to the case. But the court doesn't have subpoena power over him, and, for obvious reasons, he's not eager to testify voluntarily.

We're still at least a day from being able to assess which McCourt, if either, is in the lead. But you can be sure no one is going to come out smelling like roses. It takes a series of massive catastrophes to get to this point, and unwinding everything is an ugly process.
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  1. It's hard not to see a settlement during that stupid 2 week break. With these two you never know though. The only good news I've heard lately (other than Frank embarassing himself on the stands) is in T.J. Simers' last column which says "Jamie's lawyers seem unanimous in their belief no matter how this all turns out, the Dodgers will have to be sold." While I don't necessarily believe that to be the case, any ray of hope is better than nothing.

  2. I don't know whether to thank Bill Shaiken or curse him. His article is breathtaking in its scope and veracity. Since MLB protects owners from exposing their books, an article like this is absolutely essential in tying together the Gordian knot that lies at the heartlessness and chicanery of these vile and pestilent monsters from some realm that only HP Lovecraft could envisage.

    Have any crimes been committed, however? Crimes that could send these charlatans away for the rest of their natural lives? Even if Frank accepted a front loaded deal from FOX to extend TV rights, the cumulative debt is larger than most small countries. This is so much worse that I even imagined. I am left numb and cannot fathom exchanging a single shekel of my hard-earned shekels to contribute to their war crimes.

    Forget about Bud Selig and Bob Dupuy and FOX, for a minute. The one name that has yet to be mentioned, as the dominoes move backwards, is Peter O'Malley! While the team had already degenerated before FOX, including a long period of team failure, at least the organization hadn't become THIS. The four-year run of playoff success was obviously the end result of Dan Evans and Logan White under the Bob Daly regime. These people have got to go. They have got to go NOW, no matter who runs it into the ground again, or resurrects it.


  3. Oh, get a grip Tony. Catastrophic?

    Another explosion in the Gulf is catastrophic.

    Getting into the post-season only 4 out of 7 is just disappointing.

  4. I see a bankruptcy situation closing in with a pre-planned action and the McCourts getting out with that plan with some money, and new equity coming in. The banks will take a blow on this.
    Look at the Rangers deal for hints.

  5. exactly@truly blue. What's happened to the Dodgers is deplorable, but seriously, it's only baseball. Also, $443M, while quite hefty, doesn't approach what the Glazers have done to Manchester United, the debt they've piled on is something to the tune of like £600M+. Almost double the Dodgers.

    Also, I don't quite understand your point re: O'Malley, I think he's already been in public about how sad he was that he had to sell the team to Fox, but he had to do it because he couldn't compete. At least he didn't lie about it like the McCourts. Ultimately, the blame lie with Bud Selig & Fox.

    One final point, Bob Daly was brought in by Fox, he only made a token investment in the team, he never truly owned the Dodgers.

    The divorce proceedings aside, I don't understand all this talk about the McCourts and impending bankruptcy. It's clear that they're simply trying to tread water until they're able to cash in on the new media rights in 2013 (or more likely 2011/2012 when they renegotiate with Fox using their own channel as leverage.) Either way, there will be a new source of income to keep this boat afloat.

  6. After all of these awful financial revelations, I get the idea that Frank could actually benefit (at least in the short run) by simply giving into Jamie and asking her to share the pain of their debt repayment ....

  7. @TrulyBlue - So, you're jumping on a fellow Dodger fan for his diction? Really? Well dude, you're a moron because in DODGER terms (this is a site called this whole thing is a major catastrophe.

    And @ Greg, you're a moron too. I mean, "it's only baseball"? WTF are you talking about? I've been going to Dodger games since I was a wee tyke in the early 70's. My 6, 7, and 8 yr old bday parties we're at Dodger Stadium. I pretty much cried when they lost to the Yankees in 1977 and '78 (hey, I was still pre-teen) and I hugged a bunch of people I didn't know when Gibson hit his home run in the 1988 WS.

    As far as I'm concerned, in Dodger terms, this whole McCourt debacle is a super catastrophic disaster of epic proportions. Not to mention, it really sucks.

    Dodger fans deserve better.

  8. No subpoena power is necessary to get this guy's testimony. Either side could have taken his sworn testimony at any time during the time this case has been on file,then his deposition could be presented at trial just as if he were there testifying live. Whether to take his deposition was a tactical decision by the lawyers, just as calling him to testify live would be if he were within subpoena range for the trial.

  9. @anon@859pm - lol, fine, for me, it's only baseball. I care but not to that extent and if you do, well, good for you.

    @anon@915pm - you're right, however, as have been pointed out, I think in a LA Weekly blog post, Silverstein is being tossed under the bus and all the blame is going to be put on him, so for the sake of his law practise (which would then potentially open itself up to litigation), Silverstein is probably not real eager to testify and would therefore need to be compelled to testify, though Gordon does not have the power to do so. And incidentally, this was the angle that I hadn't thought of before as to why nobody had Silverstein's testimony.

  10. I don't really see that big or a successful lawsuit against Larry Silverstein or Bingham McCutchen. The MPA intention was to shield residential properties of the McCourt as of March 31st, 2004, not be a bombproof post nuptial that can supersede California community property laws

    Second, Marshall Grossman, the LA Dodger's attorney is a member of the Bingham McCutchen as well.

    There would be a case if there was the intent of fraud, but there isn't. I haven't read the MPA, but from my gist is that for all intent and purposes, it shields the McCourts assets not used in the Dodgers' purchase from Dodger creditors.

    The problem also if Frank wants to sue Larry Silverstein for the MPA, it was a really bad document to keep the Dodgers as separate property..

    I feel where Larry Silverstein did a bad job, or Bingham McCutchen did for the McCourts is to make sure both got separate legal counsel to look over the MPA. It basically took 4 years for a lawyer to pick out the problems with the MPA and the McCourt's holdings/assets. Jamie not having outside counsel at the signing of the MPA is much worse than the typos or the mix up.

  11. But I thought the MPA works both ways. Are you implying that Jamie couldn't have kept the houses to herself had the Dodgers went belly up?

  12. In response to Anon on 12:38 am..

    The McCourts could had shield the residential properties from creditors, because they weren't used as collateral for loans.

    If the Dodgers went bankrupt, the only residential properties that would had been at the mercy of creditors were houses bought with money connected to the Dodgers, like the $60 million loan that Frank and Jamie took out with the parking lot as collateral, and used $50 million to fund their lifestyle and buy up top of the line residential properties.

    The MPA possibly isn't a shield for Jamie as well. California Community Property laws are comprehensive. The Residential Properties are 50/50 as well. Jamie is also responsible for 50% of the debt of all the McCourt Assets...

  13. Interesting side note....Wednesday afternoon's game, with highlights shown on ESPN.....had more empty seats than I have seen in a long time at Dodger Stadium. Maybe this all this noise is finally shaking the fans up enough to walk away.

  14. Anonymous - I was at Wednesday's game. The place was less than half full, with a lot of them being Phillies fans. I don't think they ever announced the "paid attendance." A lot of chatter in the stands and restroom about how the McCourts suck, and how the trial is probably a lot more interesting than watching the Dodgers sleepwalk through another uninspired loss.


    Most of the media coverage is focused on the abortive property agreement. From what I read, Frank has a decidely uphill battle on this front. Even by his own testimony, there was no intent on Jamie part to give up her interest in the Dodgers.

    However, the larger problem for Frank is that if he wins on the property agreement, from what I have read, it does not include any waiver by Jamie of the right to support which could be (is with their lifestyle) as great a burden as her right to share in the community income and to support from the community income.

    A clear example of the problem is the mortgages on the various residential properties. As reported, Jamie made $2 million a year as Dodger president, but even that generous salary was no where near the amount required to pay the mortgages on those properties. When she sought temporary support, it was reported that the monthly mortgage payment on the various properties was about $500,000 a month. Jamie's salary as president would only support those payments for one-quarter of the year, even if she spent all her salary on the mortgage payment.

    Frank's lawyers have sold him a bill of goods. His obligation to support Jamie makes the issue of Dodger ownership somewhat of a moot issue. Frank has a losing position. The sensible thing to do is for them to work out some reasonable arrangement with Jamie, but their tactics (starting the litigation by putting a scarlet letter on Jamie) has probably so inflamed the situation that she may now have as little reason about the situation as Frank.

  16. Not claiming any inside knowledge here, but criticising Frank McCourt's lawyers for not working out a reasonable settlement, or for being so mean that such a settlement isn't likely, is absolutely not the way the world works. It's one thing to say someone should have worked out a reasonable settlement but it doesn't matter how reasonable any offer is if the other side won't accept it, and there's been no published evidence suggesting that McCourt turned down a "reasonable" offer. As for the scarlet letter thing, it's not even mentioned in this trial, and you hear a lot more about both Mcourts' greed and profligate spending (largely if not entirely undisputed by the way) than any kind of immorality. If that scarlett letter is a dollar sign, you've got a point.