There was much rejoicing over last week's ruling in the McCourt divorce case, which made it more likely that the Dodgers will be put up for sale. Bill Plaschke started rounding the bases. T.J. Simers wanted to put a statue of Judge Scott Gordon outside Dodger Stadium.
Hate to be a grinch about it, but the celebration is premature. In the words of dodgerdivorce.com, Frank McCourt is not dead yet.
Consider the following timeline of events, which nobody has paid the slightest attention to before now, but which will loom large in the next phase of the Dodger divorce proceedings.
June 9, 1977: Frank McCourt, a single man, incorporates the McCourt Company in Delaware. He is the sole stockholder.
Sept. 15, 1977: Frank McCourt incorporates Broderick Properties, Inc., a subsidiary of the McCourt Company, in Delaware.
March 10, 1978: Broderick Properties, Inc., signs an option to buy 24 acres of Boston waterfront land from the Penn Central Railroad.
Nov. 3, 1979: Frank and Jamie McCourt get married.
So why is this important? For the moment, the Dodgers are presumed to be community property. That's to say, unless Frank proves otherwise, the team will be split 50/50.
To keep that from happening, Frank will have to go to court with some evidence that the team was acquired with “separate” funds that predate the marriage. This process, called “tracing,” will entail a lot of forensic accounting, which will be costly and time consuming. (He can afford it.)
Boiled down, the argument will look like the above timeline. Frank will contend that the Dodgers were acquired by the McCourt Company with funds secured by the Boston waterfront land. Since both the waterfront land and the McCourt Company predate the marriage, the Dodgers should be considered his separate property. (The story of how Frank acquired the waterfront land is much more complicated than it's presented here. If you want to read more about that, check out this July cover story.)
If you look back at Jamie's divorce pleadings, she has already begun to rebut this argument. She writes:
When Frank and I married we were young and had no significant assets. Everything we own today we built together during our long marriage. Indeed, I gave Frank the first $1,000 to start up his first company.
Who knows if any of that is true. But, barring a settlement, you can see where this is headed: back to Boston, and back to the late 70s.
(Incidentally, Frank's side says you don't have to get into all this because the title to the Dodgers is in Frank's name. Whether you find that persuasive or not, that's their argument.)
To be clear, Jamie certainly has the upper hand in the next round. The community property presumption is in her favor. But that's no guarantee of anything, especially in light of that timeline. Absent a granular understanding of how the McCourts financed their business over 20-plus years, it's simply impossible to predict how this will end.
So for now, Plaschke and Simers should keep their champagne in reserve.
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