Friday, September 3, 2010

Wrapping up the week.

The first week of trial wrapped up this afternoon, and Jamie McCourt had yet to be subjected to the stylings of Steve Susman. That much-anticipated encounter will not occur now until September 20--assuming there is still an issue to be tried at that point. Sources are mixed on just how far Jamie and Frank are apart in settlement talks. While many--myself included--speculated that the two week break would be especially conducive to settlement talks, the pace of the trial has changed things a bit.

Because Jamie hasn't faced the same scrutiny on cross as Frank did on direct, it's not especially meaningful to say one party is ahead or behind. It's excellent strategy on Boies' part. While I imagined he would keep Frank on the stand through Wednesday to win the night's headlines before handing him back to Susman, I didn't think far enough ahead to recognize he'd make essentially the same play with Jamie. She goes into the break with the public still buzzing about Frank's admissions on the stand.

And some interesting admissions they were. In my absence, and in no particular order, Gene Maddaus, Bill Shaikin, Molly Knight, John Weinbach, Carla Hall, and several others kept you well-informed about the goings-on in trial. From Frank's not-so-subtle communication with Susman to Jamie's first answers on the stand to apparent drama in the room next door, the end of the week wasn't short on interesting occurrences.

I'll try to get much deeper into what we learned this week from a big-picture perspective once I return from the family obligation that has kept me away, but here is a quick rundown of the lay of the land: The parties break for two weeks to accommodate Judge Gordon's calendar and--ostensibly--attempt to make some progress toward a settlement. Because of where we're at in the proceedings, I'm not sure Frank's side is in a position to demand its goal in a deal--whatever that is. For the same reason, I wouldn't be surprised if Jamie's team is trying to negotiate from a stronger position than it might have earned.

Assuming we are back in court on the 20th, Susman will get his chance with Jamie and we will move on to Frank's witnesses. I've heard from several people that Larry Silverstein will indeed make an appearance early that week, but I'll believe it when I see it. The rest of Frank's witnesses are expected to testify as to Jamie's specific intention to remove herself from the success or failure of the Dodgers, and Jamie's attorneys will try to show that such statements are inconsistent with her actions and experiences. The trial is moving along slowly, and it will likely reach the week of the 27th, as well. Once it concludes, Judge Gordon will have up to 90 days to make a decision on the matter, and then the statutory deadlines are set for any potential appeals. We're not close to through yet.

Thanks for the encouragement and support this week. It's been exciting. Barring a settlement, I'll see you in LA on the 20th.


  1. Unless Gordon has been paid off by MLB and Selig, which is not out of the question, I presume that the MPA will be ultimately deemed redundant. At that point, Jamie will have a considerable stake in the Dodgers and Frank will, no doubt, begin an appeal process. Common thinking is that the two of them will not have the financial resources available to run the team, nor to buy out the other, and will be forced to sell.
    My question: Will the sale occur simultaneously to Frank's appeal, or will he and co-owner Jamie still own the team as he appeals even IF he cannot afford it? Who would run the purse strings? I'm assuming they would sell and then Frank would appeal. Yes? No?
    Hopefully, THEY will quietly do that and continue their case outside of the Dodgers.

  2. I doubt the team can be sold before there is an ownership agreement between Jaime and Frank. Who would buy the team before the current ownership is straightened out, even if they could?

  3. The worst case scenario outcome from the Dodgers' fans standpoint is a settlement whereby Jamie gets what she wants: a share of the Dodgers profits without an equivalent risk of loss. This would mean even more money plundered from the baseball team for McCourt family's personal lavish lifestyle. A settlement with that outcome would mean Frank McCourt decides to keep the team, albeit with more McCourt family money draining the Dodgers resources. If, on the other hand, the Court orders such an outcome, that would increase the chance of a sale, which clearly is the only way this thing can end. The sooner the better.
    By the way, I want to echo the people who've appauded you for the great work on this site. I don't see where the buzz about Frank's admissions is coming from, if by that you mean admissions that hurt his divorce case. If you mean his "admissions" that he's intended from day 1 to keep payroll low and McCourt profits high, yes... that's finally come out of his mouth; though I've never met or heard from anyone who didn't know that to be the case from the moment he "bought" the team without a penny of his own cash.

  4. In response to Anonymous...

    Jamie isn't going to get a settlement that excuses the debt that she ran up on the Dodger's dime. I don't how many houses were bought with loans with Dodgers' assets, but the two Malibu homes were bought with loans with the Dodgers' parking lots as collateral. If those houses are sold, she can't keep the proceeds, no matter if her name is on the titles.., the primary obligations is to pay off those loans. If her name is on the loans, she has a fiduciary responsibility to pay them off.

    Any settlement has to be pretty comprehensive. The Family Court and California Community Property Laws are just as concern with dividing up the debt as they are with the assets. The Court may not accept any agreed settlement between both sides, if the debt issues aren't address very specifically.

    As much as the McCourts both discuss with some pride the amount of assets they hold in their court filings. The debt they hold is absolutely incredible. I give them some kudos for feeling comfortable with the huge amount of debt they are carrying, and they could sleep at night, or continue to add more debt obligations. It is pretty unnerving to carry hundred of millions of debt as the McCourts are carrying, no matter the assets they possessed.

    Jamie's sides cannot expect that she can write off the debt or shift the burden to Frank to pay off the loans they both used during their ownership of the Dodgers. Any final settlement is going to have some of the debt deducted, given the debt payments are huge, (one reason she was asking for $1 million a month, to pay off mortgages and bills)

    On the aspect of Frank's "admissions" in court. They were a disaster, both on a PR front and a legal front. Jamie's time on the witness stand could be a disaster as well, but Frank's time on the stand undermined his case. He is resting his ownership of the Dodgers on a MPA agreement that really doesn't put the Dodgers as separate property, or it is just one sentence or down to one word, with not much forethought put into it. Compare to the details of the property titles in Jamie's name and how they weren't used to purchase or run the Los Angeles Dodgers.

    Second, the McCourts' actions after the March 31st, 2004 MPA hardly complies with the MPA, given they took out money from the Dodgers to buy more properties, and Frank co sign some of the mortgages. Jamie was an officer of the Los Angeles Dodgers, they both charge the Dodgers for their expensives. The MPA probably only protect their assets prior to March 31st 2004. They were definitely using their assets as community property.

    If they really wanted to make a separate property contract. They should put a pretty detailed and comprehensive contract stating that Frank owns the Dodgers, and how it would remain separate property in case of divorce, no matter how unseemly the subject was at the time to a married couple for over 20-25 years.

  5. My guess is most Dodger Fans, I mean all Dodger Fans,want to rid themselves of the McCourts. What resolution should be pulling for? I take we should all be, temporarily, Jamie fans.


  6. What is particularly galling about the timing of this trial, is the fact that if there is no settlement and Gordon takes the full 90 days to determine an outcome, that puts the team smack dab in the middle of the winter meetings. I'm assuming that the organization will continue with business as usual, namely the continued reduction of payroll in preparation for a seemingly inevitable sale. This suggests that the team would very likely pass on re-signing Kuroda, could be seeking to move some of the more expensive young players such as Loney and potentially Broxton. All of this with most likely a new Dodger manager in Don Mattingley or Tim Wallach and new coaches. Then a sale and who knows what.
    No matter the scenario, the team is probably going to be gutted even more for 2011 and under new ownership in 2012. Another year of mediocrity.

  7. Why has MLB been silent on this?

  8. There's no benefit to MLB making any sort of statement right now. They may very well have a planned course of action, but they're not going to come out and take sides. They'll wait for the trial to finish and then may take action then. Especially if the DA's office concludes there was wrongdoing in their investigation, that's something that they would get involved in.

    But considering MLB doesn't get involved as Peter Angelos has ruined the Orioles and many other owners just as bad as the McCourts run their organizations into the ground, I'm not sure how likely they are to get involved with the Dodgers.