Former LA Dodgers Owner Frank McCourt's Divorce Outcome Survives Appeal
Posted: 9th March 2015
Posted in: News
Posted by: Dean Evans, Partner
Dodgers Owner Frank McCourt’s Divorce Outcome Survives Appeal
The former owner of the LA Dodgers Frank McCourt must have been biting his nails harder than during a tied game in extra time, whilst awaiting the Appeal Court outcome in his divorce.
McCourt had entered a property settlement with his ex-wife which involved her receiving $131 million plus certain real estate, whilst he retained the LA Dodgers team and the rights attaching to the team (TV etc).
During the property settlement conducted between 2009 and 2011, McCourt had argued his team had a limited value, as low as $300 million. However, he managed to sell his interest in the team for $2.15 billion a short time later, in 2012.
His ex-Wife argued that she had really only received 7% of the couple’s property in lieu of 50%.
The Wife’s case was dismissed at trial and now she has lost her Appeal against the settlement outcome, meaning she gets no more. Indeed, she will have to pay almost $2 million towards McCourt’s legal bill.
The Appeal decision determined that the Wife’s case was not credible, after finding that McCourt had provided 22,000 pages of financial information to the Wife and her lawyers. A further finding that the Wife had herself, reviewed financial documents in 2009 which stated the value of the interests might go as high as $2.4 billion, was a significant factor in her loss.
The Court determined that the Wife had exercised a choice to receive “bricks and mortar” certainty in her property settlement outcome, accepting cash and real estate, which involved a conscious choice to abandon seeking an interest in other assets which would have involved uncertainty and ongoing risk presented by the possible variance of valuation and uncertainty of a sale of the LA Dodgers assets.
The corollary lesson to be learned and guarded against in Australian terms, is that it is vital to ensure that your spouse receives full disclosure of financial information and has access to whatever information might exist to allow a careful consideration of what decision should be made before the case is settled and concluded.
Had McCourt held any information back, including whether there had been offers made to acquire the Dodgers before or during the settlement negotiations and conclusion of the property settlement case, the likely result would have been different.