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January 31, 2011 7:15 PM

Former Manatt Phelps Managing Partner Advising Mets; Dodgers Divorce Bingham

Posted by Brian Baxter

Two of Major League Baseball's most significant franchises--the New York Mets and Los Angeles Dodgers--are contending with messy legal matters in the owners' suite. The Mets have turned to an adviser with ties to one Am Law 200 firm. The Dodgers, meawhile, have parted ways with another.

First, on the Mets front. Struggling to overcome financial pressures following a civil suit filed against him by the trustee overseeing the Bernard L. Madoff Investment Securities (BLMIS) bankruptcy, real estate billionaire and New York Mets owner Fred Wilpon announced on Friday that he would seek to sell a minority stake in the franchise.

Baker & Hostetler partner Irving Picard, the court-appointed BLMIS trustee, sued Wilpon and Sterling Equities--a group of companies owned by the Wilpon family--in December. The civil suit was filed under seal, so it's not exactly known what potential liabilities the Wilpons and Sterling face, but last month another major Madoff investor, the estate of billionaire Jeffrey Picower, settled with Picard for $7 billion in the largest civil forfeiture payment by an individual in U.S. history. (A bankruptcy judge approved the settlement earlier this month.)

Wilpon has turned to a well-known sports dealmaker in Stephen Greenberg, a managing director of boutique investment bank Allen & Company, to advise on the sale of 20-25 percent of the Mets. Greenberg, the son of Hall of Fame baseball player Hank Greenberg, also happens to be a former managing partner of Manatt, Phelps & Phillips.

Greenberg worked at Manatt from 1977 until 1989, serving during his last two years at the firm as managing partner. He left Manatt to become deputy commissioner and chief operating officer of Major League Baseball.

According to this profile published by Fortune last year detailing Greenberg's journey from attorney to I-banker, the son of baseball royalty began representing baseball players during the eighties, and worked closely with former Manatt associate-turned-sports agent Arn Tellem.

The Fortune story notes that while Greenberg is notoriously tight-lipped with reporters--Allen & Co. doesn't have a Web site or issue press releases--he has carved out a name for himself by backing and brokering several big-time sports deals. Those include the $175 million sale of the Classic Sports Network to ESPN in 1997 and CBS's $325 million acquisition of the College Sports Network in 2005. (Greenberg currently serves as chairman of the board of directors at CSTV Networks.)

According to a transcript of a Q&A with sports reporters published on the Newark Star-Ledger's Web site Friday, Greenberg considers himself "defrocked" and is no longer actively practicing law. Greenberg said that only a partial sale of the Mets is being pursued at this time. Stakes in the separately owned Citi Field and the team's cable television network, SportsNet New York, are not on the block. Any investor wishing to purchase a piece of the Mets need not worry about "contingent liability" from the Madoff matter, he said. The Wilpons and Greenberg declined to comment on the civil suit filed by Picard.

A phone call and e-mail to Sterling partner Marvin Tepper, a former real estate partner at now-defunct New York firm Botein Hays & Sklar, was not immediately returned by the time of this story. Sterling general counsel Gregory Nero forwarded a request for the Mets and Sterling's outside legal advisers to team general counsel David Cohen.

Cohen told The Am Law Daily late Friday that the team has "not identified outside counsel for any potential transaction at this time." Cohen did note that Greenberg had been hired solely as a financial adviser. In a Q&A in 2007 with The National Law Journal, a sibling publication, Cohen said that he usually turns to Davis Polk & Wardwell, Alston & Bird, and Herrick, Feinstein for outside counsel.

A team of Davis Polk lawyers led by litigation partner Karen Wagner is representing the Wilpons and their affiliated entities in Madoff-related litigation. George "Gar" Bason, Jr., the head of Davis Polk's M&A practice, declined to comment on whether the firm was also involved on the corporate side. A Davis Polk spokesman said he had no information to provide at this time. (Davis Polk litigators lashed out at Picard in a new filed motion on Monday, according to the New York Daily News.)

While lawyers for the Mets are keeping quiet, some individuals have publicly expressed their interest in a buying a stake in the team, including two that have made their money in the beverage business--Long Island liquor king Martin Silver and Queens native and Glacéau VitaminWater cofounder Michael Repole, who sold his business to Coca-Cola for $4.1 billion in 2007. (Forbes has valued the Mets at $858 million; click here for a quick analysis of that valuation.)

The Wilpons first purchased a 50 percent stake in the Mets in 1986--the last year the club won the World Series--and acquired the remaining half they didn't own in 2002 from Nelson Doubleday following a civil suit over how much the team was worth. Current Davis Polk senior counsel Robert Fiske, Jr., and former firm partner Lewis Kaden advised the Mets during that dispute. (Kaden is now vice-chairman of Citigroup, the sponsor of the team's brand new 41,800-seat stadium.)

The New York Times reported on Monday that the involvement of the Wilpons and Sterling in Madoff's $20 billion Ponzi scheme was not the first time the Mets have been caught up in a clawback suit filed by a trustee. An investment firm started by Fred Wilpon and Sterling cofounder and president Saul Katz paid back nearly $13 million after being ensnared in a $450 million fraud at defunct hedge fund Bayou Management, whose former cofounder, Samuel Israel, famously sought to flee from federal custody.

The Mets did get a bit of good news this weekend--the team has reportedly secured the right to host the 2013 All-Star Game. Meanwhile, across the country, a franchise whose abrupt departure from Brooklyn a half-century ago ultimately led to the birth of the Mets has reshuffled its outside counsel roster.

According to story on Sunday by the Los Angeles Times, Bingham McCutchen and Frank McCourt, the embattled owner of the Los Angeles Dodgers, have parted ways. McCourt has been locked in a nasty divorce battle that could cost him control of the Dodgers, and as counsel to McCourt and the team itself, Bingham has been caught in the middle. (Click here, here, here, here, and here for some of our previous coverage of the case.)

The LAT reports that McCourt and Bingham parted ways late last month after a Los Angeles County superior court judge threw out a marital property agreement that would have given McCourt sole ownership of the team. Bingham's name has emerged in settlement discussions as a possible way for the firm to avoid a malpractice suit.

When reached by The Am Law Daily on Monday, a Bingham spokeswoman said that the firm "cannot comment on client representational arrangements."

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Steve Greenberg was managing partner while I was a summer clerk, and the nicest, most decent person ever to come out of the Manatt firm. Much of the civility of the firm left when he did.

This Trustee must be stopped!

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