Some long-latent questions about how the Dodgers will be run for the duration of the McCourt divorce litigation came into sharper focus yesterday following a hearing in Los Angeles County Superior Court. Two stalwarts of the saga were there to gather quotes and develop the storyline. LA Weekly's Gene Maddaus offers this note from Jamie's lead attorney, on the timeline of the next potential trial in McCourt v. McCourt:
Speaking after a brief court appearance, Dennis Wasser said it will take at least [a year] for attorneys on both sides to prepare.
"The discovery on the second phase is not simple," he said. "It'll take a long time and it will cost a lot of money."
As we've discussed, the next trial would concern the characterization of each and every asset of the marriage, including the Los Angeles Dodgers. The principle issue would be whether the couple's deliberate titling of the Dodgers in Frank's name would overcome the California family law presumption that property acquired during a marriage is community property in the absence of clear and convincing evidence that the parties meant to keep it separate.
Maddaus' post also passes along another nugget from Wasser, who says there will be "skirmishes" over other issues in the months leading up to a possible second trial. What are the parties skirmishing over? Enter Bill Shaikin:
After a procedural court hearing on Tuesday, attorneys for Jamie McCourt said they would soon assert what they said were her rights as co-owner of the team.
"That is not to say she is going to appear on the first day of the season and say, "I'm here; I'm firing people,' " attorney Dennis Wasser said.
Instead, in trying to assure her interest in the value of the team is protected, Jamie is likely to ask for the Dodgers' most recent financial results and projections, including information on discussions with Fox for a new television deal.
Jamie's position seems reasonable enough: while the couple is still fighting over the Dodgers, she wants to make sure nothing happens that could jeopardize the long-term value of the club (and, thus, her potential take from the divorce). The advance from Fox to Frank on the club’s TV deal might not have sat well with her at all. The issue, though, is just how far she means to go. Asking for information is one thing, trying to gain actual influence on Dodgers decisions is another. Both in the days following the MPA trial and the moments following today's hearing, Frank's side has been perfectly clear: they believe Jamie McCourt is in no way entitled to any sort of control over the Dodgers.
This presents several analytical hurdles. When it comes to the eventual judicial division of the McCourts' assets--should it occur--Judge Gordon will not likely be forced to award joint ownership to both Frank and Jamie. If he specifically finds--and gosh, does this seem like a lock--that Frank and Jamie are incapable of working together as co-owners, he can order one spouse to buy out the other. Factors like experience and capability to manage the Dodgers can figure into Judge Gordon's decision to award the team to one of the McCourts, and that would be a fight unto itself.
Jamie wants additional and continuing disclosure about the Dodgers' operations. I never know just how technical to get around here, but the bottom line is that her request for information looks viable: California Family Code requires a spouse managing a community property business to give the other spouse equal access to information about the business upon request. The McCourts are no longer spouses, of course, but the duty of disclosure appears to run until the assets are divided by the court or the parties.
As for actually influencing Dodgers operations, however, the issue isn't as clear cut. There are certain automatic restraining orders effective upon the initial filing for divorce. These restrict the parties from making major changes to their assets; things like buying, selling, or encumbering big assets are generally forbidden. However, California courts have held that bona fide third-party entities (like holding companies) that have legal control of the assets in question aren't automatically bound by the basic restraining orders. Further, even major actions like purchases, sales, or encumbrances of assets might be in the usual course of business for a third-party holding entity, even where such things would be off-limits to the parties themselves.
The upshot is that if Jamie McCourt wants to exert any influence over Dodgers operations in an effort to preserve or improve the assets' value, she probably needs to take one of two routes. First, she might argue that the numerous companies connected to legal ownership of Dodgers assets are not truly separate and distinct entities from the McCourts themselves, so the automatic restraining orders apply. Second, she could file for a restraining order against the third-party entities themselves. As best I can tell, she hasn't done this, but I am not positive. Either way, as the time horizon of this litigation extends farther and farther into the future, it's clear that Jamie intends to keep a close eye on the management of the defunct marriage's crown jewel.