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Baseball’s McCourt High-Asset Divorce Battle Continues

On Behalf of | Sep 2, 2011 | Property Division

It is a divorce case that features many elements, ranging from bankruptcy and widely divergent views concerning contract interpretation to issues relating to separate versus community property and the rights of a professional sports organization to legally intervene in the affairs of a business owner.

In short, it is complex, but at its core the Frank and Jamie McCourt divorce case relates most centrally to this: high-asset property division.

The McCourts own a baseball team, namely, the Los Angeles Dodgers, but how that ownership is allocated between them is a bit uncertain and a highly acrimonious matter at present. Frank says he owns the team outright. Jamie says that, pursuant to California’s community property regime, she owns half.

The problem is that the couple executed multiple property division agreements in the past that provide for two completely disparate outcomes: One sets forth Frank’s view, and the other agrees with Jamie. The court presiding over the case has not set a hearing date to determine ownership, and the matter is likely to remain unresolved until sometime next year.

The couple seemed to have reached agreement a couple months back, following a sale of the team’s media rights to Fox Spots for $3 billion, but Bud Selig, the commissioner of Major League Baseball, used his power to act on behalf of the league to block the sale. Selig said it wasn’t in the league’s best interest, charging that Frank McCourt has a proven history of using funds that should be going to his team to finance an ostentatious lifestyle.

Following Selig’s intervention in June, the Dodgers filed for bankruptcy. This has opened up numerous new issues and contentious accusations. Jamie McCourt says that Frank had a legal duty to apprise her of both the media sale negotiations and the bankruptcy filing, which he did not do. Case insiders say that McCourt might use the bankruptcy to open up bidding among potential buyers for a new media rights deal, which Selig would be likely to oppose again.

There is no end to the dispute on the near horizon in a matter that the Los Angeles Times states is the most expensive divorce case in California history. Estimates are that attorney fees could reach $35 million before all issues are resolved.

Related Resource: Reuters, “Analysis: McCourt’s long-shot odds to hang on to Dodgers” Aug. 30, 2011