LOS ANGELES (AP) - A settlement has been reached between Frank and Jamie McCourt in a costly and nasty feud over control of the Los Angeles Dodgers, paving the way for a showdown in bankruptcy court between the embattled team owner and Major League Baseball.
The deal was struck between the former couple, a person familiar with the situation told The Associated Press on Monday. The person requested anonymity because the settlement has not been made public. The Los Angeles Times (https://lat.ms/nUPOKH ), which first reported the settlement, said Jamie McCourt would receive about $130 million.
The divorce case has been placed on hold until a bankruptcy court in Delaware determines the fate of the team. A hearing is scheduled for Wednesday and a judge will consider dueling motions over four days starting Oct. 31.
Jamie McCourt spokesman Matthew Hiltzik declined to comment in an email to The Associated Press. Frank McCourt spokesman Steve Sugerman did not immediately respond to a request for comment.
The divorce agreement removes Jamie McCourt, who had asked the divorce court to order the Dodgers sold, as an obstacle in Frank McCourt’s bid to keep ownership by selling team television rights, according to the Times.
“I think this may be a strategically sensible decision for her,” said Scott Altman, a law professor at the University of Southern California. “If he (Frank McCourt) gets $130 million out of bankruptcy, it’s hers. It reduces her risk because she doesn’t have to share proceeds from the bankruptcy case.”
The settlement now allows Frank McCourt to focus on his battle with Major League Baseball, which is seeking permission from a bankruptcy judge to file a reorganization plan that calls for McCourt to sell the Dodgers.
MLB spokesman Pat Courtney declined comment about the settlement.
Attorneys for Frank McCourt have argued a media rights sale is the best path out of bankruptcy for one of baseball’s most storied franchises.
The McCourts previously reached a divorce settlement on June 17, but the deal was contingent on approval of a proposed television contract between the Dodgers and Fox. That deal would have given Jamie McCourt $100 million and she would retain the former couple’s six luxurious homes.
But baseball Commissioner Bud Selig rejected the 17-year TV contract with Fox, reported to be worth up to $3 billion, noting in part that almost half of an immediate $385 million payment would have been diverted from the Dodgers.
On June 27, Frank McCourt took the Dodgers into bankruptcy.
Jamie McCourt subsequently lined up behind Major League Baseball and Fox in asking the bankruptcy court to reject Frank McCourt’s bid to auction Dodgers television rights.
If Frank McCourt were to prevail in bankruptcy court, it’s unclear whether the judge would allow him to tap into the TV money to pay the settlement. It’s also unknown whether the proceeds from the sale of the team would even exceed $130 million.
Some observers said one of the reasons behind the settlement may be the legal bills that have amassed over the past two years. The former couple has racked up more than $20 million in fees, according to court documents.
“This ends it,” said Los Angeles family attorney Robert Nachshin. “They stop paying divorce lawyers and she gets $130 million.”
MLB had assumed control of the club’s day-to-day operations in mid-April before the team filed for bankruptcy. Former Texas Rangers President Tom Schieffer was appointed to monitor the team on behalf of Selig, who said he took the action because he was concerned about the team’s finances and how the Dodgers are being run.
Last year, the McCourts went through a highly publicized trial that focused on a postnuptial marital agreement they had signed in 2004.
A Los Angeles judge ruled in December that the marital agreement which gave Frank McCourt sole ownership of the Dodgers was invalid, clearing the way for Jamie McCourt, who served as the team’s CEO but was fired by her ex-husband two years ago, to seek half the team under California’s community property law.
A group backed by Chinese government-owned investment banks had made a $1.2 billion offer to buy the Dodgers, but Frank McCourt has repeatedly said he’s not interested in selling the team.
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