LOS ANGELES (CN) – Jamie McCourt sued her ex-husband, Frank McCourt, for $770 million, claiming he misrepresented the value of the Los Angeles Dodgers in their divorce settlement.
The McCourts’ divorce was tabloid fodder for months in Los Angeles, coinciding as it did with the Dodgers’ financial problems and bankruptcy, a failed TV deal with Fox, a Dodgers charity scandal, a quarrel with Major League Baseball, and McCourt’s sale of the team.
Jamie McCourt claims she settled for $131 million because Frank lied about the value of his assets, above all, the value of the Dodgers. She says she deserves at least $900 million.
Six of her seven causes of action “are protective in nature,” Jamie McCourt says in her Superior Court complaint, to beat the time limit to challenge their divorce agreement. Their divorce was completed on Jan. 19, 2012. She wants that settlement agreement set aside.
The McCourts were married on Nov. 3, 1979, and have four children. Frank McCourt bought the Dodgers in 2004.
“The parties had little when they married,” Jamie McCourt says in her complaint. “They both worked, and with the aid of substantial loans from Jamie’s father, they succeeded in accumulating assets. After 30 years, all the assets they had accumulated were quasi-community property or community property.”
Jamie claims that Frank gave her wildly varying estimates of the value of the Dodgers, from $2 billion in 2004 to less than $300 million in 2009.
Before they separated, she says, she “played a significant role in the Dodger organization, but not in significant financial dealings. The financial aspects of the Dodger assets were Frank’s domain, and at all times relevant to this action, Frank had special and superior knowledge of information necessary to evaluate the Dodger assets.”
She claims that “before the commencement of the prior action” – the divorce – Frank “fired” her, “and from that point forward he completely excluded her from every aspect of management and from all information concerning the Dodger assets and their value.”
Jamie filed for divorce on Oct. 27, 2009 and the stipulated judgment of dissolution of marriage – status only, was entered on Oct. 27, 2010, according to the complaint.
During 2010, an expert for Jamie estimated the team’s value as $1.1 billion to $1.15 billion, minus $600 million in debt, making the total value $500 million to $550 million. But “Frank strenuously disagreed with these numbers. He persisted in representing to Jamie that the value of their assets was less than $300 million,” the complaint states.
Jamie says they tentatively agreed to sell the team and split the profits 50-50, contingent on Major League Baseball approving Frank’s proposed 17-year deal with Fox TV. But the league rejected it on June 20, 2011, and one week later, Frank filed for Chapter 11 bankruptcy, “saying he would not sell the team and would sue MLB,” according to the complaint.
Jamie claims “a friend” told her in July 2011 that the team was worth as much as $900 million, but Frank claimed, under penalty of perjury on Aug. 31, 2011, that the total value of family assets was $294.1 million, and their net worth was “only $162,528,000.”
Jamie says that was false: “that their assets had a market value over $2.3 billion or more than $1.7 billion after payment of debt.”
In the 10 weeks that followed, as the divorce, the bankruptcy, the frustrated TV deal and sale of the team hogged the L.A. headlines, Jamie reconsidered, and agreed that the net value of the team was about $300 million, she says in the complaint. She say she agreed to take $131 million, plus a tax indemnity, in their October 2011 marital settlement.
Two weeks later, on Nov. 1, 2011, Frank announced he was selling the team.
What a surprise!, Jamie says: “In March 2012, just weeks after entry of the stipulated judgment, Frank accepted a pre-emptive offer from Guggenheim Partners (‘Guggenheim’) to buy the most significant part of the Dodger assets. That company had already been formed and registered by November 10, 2011, months before its bid was formally accepted. The agreed price was $2.15 billion for part of the Dodger assets, but the agreement allowed Frank to retain certain valuable parcels of real estate, including an entire city block, the right to significant parking lot rentals, a 50 percent interest in the 276 acres of real estate near Dodger Stadium, probably worth another $200 million and perhaps four or five times that amount, and other valuable rights.”
So Frank’s total nonresidential assets were “in excess of $2.3 billion and possibly more than $3 billion. The price was no surprise to Frank,” Jamie says in the complaint. “Peter Cohen, Blackstone’s managing director, who advised and represented Frank’s companions with respect to the sale, has stated publicly that ‘from day one, when [he] first started this,’ he was aware that the Dodger assets would bring a price that high.” Day One was July 7, 2011, Jamie says. (Brackets in complaint.)
In short, Jamie says, Frank rolled her: “Frank’s representation that was parties’ net worth was only $162,528,000 was actually less than one-tenth of their actual net worth at the time. Had Jamie received an equal share of the quasi-community assets, her share had a value in excess of $900 million ($1.7 billion + $131 million ÷ 2), plus her share of the residences.” (Parentheses in complaint.)
Jamie wants the stipulated judgment and marital settlement agreement set aside as fraudulent and oppressive, and/or mistaken, and unduly influenced, and a lot more money.
She is represented by Bert Fields, with Greenberg Glusker Fields Claman & Machtinger.
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