December 7, 2010 8:08 PM

Bad News for Bingham: Dodgers Divorce Trial Judge Delivers Ruling for Jamie McCourt

Posted by Brian Baxter

A ruling by a Los Angeles judge on Tuesday declared invalid a marital property agreement that could grant co-ownership of the Los Angeles Dodgers baseball team to the ex-wife of team owner Frank McCourt. The decision might possibly force Frank McCourt into a sale of the franchise, which has been caught in the middle of a bitter divorce battle with his former spouse Jamie McCourt.

Our colleagues at The Am Law Litigation Daily have the full blow-by-blow behind the 100-page ruling delivered by L.A. Superior Court judge Scott Gordon. Not surprisingly, lawyers for both McCourts disagree on whether the decision upholds Jamie McCourt's claim to half of her former husbands' assets under California's community property laws, including the team he bought for $430 million in January 2004.

Frank McCourt turned to a legal team comprised of Susman Godfrey's Stephen Susman and divorce lawyer extraordinaire Sorrell Trope of L.A.'s Trope and Trope for counsel. Jamie McCourt, herself a lawyer, was represented by Boies, Schiller & Flexner's David Boies, L.A. divorce firm Wasser, Cooperman & Carter, and Santa Monica's Kinsella Weitzman Iser Kump & Aldisert.

Prominent Bingham McCutchen L.A. litigator Marshall Grossman represented the Dodgers in the dispute. The firm played a major role at trial as a result of its previous representation of both McCourts in drafting six versions of the marital property agreement at issue six years ago.

Three versions contain attachments granting Frank McCourt sole ownership of the Dodgers, while the other three grant Jamie McCourt rights to the team and other assets. Reconciling the two put Bingham tax and estate planning partner Lawrence Silverstein, who represented both McCourts, into a bit of a pickle at trial.

That's why Bingham's name popped up in settlement discussions last week, as a possible way for the firm to avoid a monster malpractice claim by Frank McCourt should he lose control of the Dodgers. (Forbes valued the team at $722 million last year.)

The only way Frank McCourt could pay his former wife half the value of his estate is through a sale of the Dodgers, the estate's most valuable asset. Neither McCourt likely has the requisite capital to buy the other out, so Tuesday's ruling could effectively put the Dodgers back on the market.

A similar situation occurred with the San Diego Padres in late 2008 when former owner John Moores divorced his wife Becky, forcing a sale of that team in February 2009. According to a report last month by the San Diego Union-Tribune, the Moores's divorce could be headed back to trial after the former Padres owner and his ex-wife failed to finalize a divorce settlement agreed to in March.

In a statement to The Am Law Daily, a Bingham spokeswoman defended the firm and disputed the potential impact of Gordon's ruling.

"The court's decision turns upon a very technical analysis of complex issues of Massachusetts and California marital property law. These are issues on which the lawyers and the foremost legal experts have differing opinions," the firm said. "The order clearly does not make a finding, nor base its conclusions on any finding, that Larry Silverstein engaged in any misconduct. Instead, the opinion places the focus on the proper question of what did the parties intend in doing their property arrangements in 2004. It is our hope that the McCourts will resolve their differences amicably."

 

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