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Arbiters to hear claims vs. Loria


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Arbiters to hear claims vs. Loria

By BARRY JACKSON AND KEVIN BAXTER

 

bjackson@herald.com

 

 

The claims of 14 Marlins minority owners against majority owner Jeffrey Loria will be heard in arbitration beginning Monday in New York.

 

The arbitration process, expected to run through June 9, comes 22 months after the 14 Canadian businessmen -- who own 6 percent of the Marlins -- filed a lawsuit against Loria, baseball commissioner Bud Selig and others, alleging conspiracy and violation of the Federal Racketeering Act.

 

The suit seeks $100 million in damages and claims Selig, Loria and Major League Baseball conspired to give Loria control of the Montreal Expos as part of a secret plan for Loria to later exchange the club for the Marlins.

 

The plaintiffs once owned 76 percent of the Expos before Loria ultimately gained control of the club. Loria acquired the Marlins in February 2002.

 

In November 2002, Miami-based U.S. District Judge Ursula Ungaro-Benages put the racketeering lawsuit on hold until an arbitration case against Loria could be heard. Three arbitrators will decide whether Loria breached his partnership duties, and have the right to award damages.

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Their case is that Loria did everything he could to destroy the Expos because he wanted to move them. Despite Loria was the only one who wanted to spend money on the team and scale back on a ballpark proposal when financing became an issue.

 

However they do have a strong case because Selig bent a lot of rules to orchestrate the three-team deal partly in an effort to add to his allies in future owners meetings.

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Reports are they actually want the entire Marlins franchise moved to Montreal, with Miami getting the Expos. We're talking all the players, off-field staff, minor league affiliates and other holdings. Nevermind that the minority owners couldn't even afford to operate them for more than a month or two, that's why they brought in Loria in the first place.

 

Not going to happen.

However it could mean that the Marlins or MLB (Marlins included) may have to pay substantial amounts to the former owners. Which could force Loria to sel the team or bring in more partners.

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Reports are they actually want the entire Marlins franchise moved to Montreal, with Miami getting the Expos. We're talking all the players, off-field staff, minor league affiliates and other holdings. Nevermind that the minority owners couldn't even afford to operate them for more than a month or two, that's why they brought in Loria in the first place.

First time I ever heard that one.

 

The one consequence is that, I think, the Spos can't be moved out of Montreal until this is settled. That's something the former owners demanded when they first started this whole process.

 

However, I can't see this affecting the Marlins in any way.

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Reports are they actually want the entire Marlins franchise moved to Montreal, with Miami getting the Expos. We're talking all the players, off-field staff, minor league affiliates and other holdings. Nevermind that the minority owners couldn't even afford to operate them for more than a month or two, that's why they brought in Loria in the first place.

First time I ever heard that one.

 

The one consequence is that, I think, the Spos can't be moved out of Montreal until this is settled. That's something the former owners demanded when they first started this whole process.

 

However, I can't see this affecting the Marlins in any way.

That is what they (the minority owners) want.

 

The want the clock turned back, they want to keep all the money Loria invested and they want their original investment percentages reinstated. They would then (being the majority owners) move the existing Marlins franchise moved to Montreal and the Expos would be sold by MLB.

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HORACE FOGEL: Longtime sportswriter for the Sporting News and owner of the Philadelphia Phillies (1909-1912). During the 1912 season, Fogel accused the National League and it's umpires of favoring the New York Giants and claimed that the pennant race was "crooked." In November 1912, the National League Board of Directors banned Fogel from professional baseball for life.

 

http://www.1919blacksox.com/banished.htm

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GEORGE STEINBRENNER: In an effort to avoid a contractual agreement with former Yankee outfielder Dave Winfield, Yankee Owner Gerorge Steinbrenner paid admitted gambler Howie Spira $40,000 to "dig up dirt" on Winfield. As a result, Steinbrenner would be given a lifetime suspension on July 30,1990 by Commissioner Fay Vincent. On July 24,1992, Vincent announced that Steinbrenner had been reinstated and could resume control of the Yankees beginning March 1,1993.

 

http://www.1919blacksox.com/banished.htm

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This is pretty cut and dried. Loria made cash calls to keep the team running, nobody ponied up the funds. By the ownership agreement Loria's share of ownership increased.

 

Considering that Loria spent more on the team than any previous Expos owner, the "destroy the team" contention has no real merit.

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I'm an Expos fan so of course I'm biased in favor of the former limited partners, but there is more to this case than you think.

 

Read the official document here.

 

Also, reports yesterday on Montreal radio said there is some shocking videotape in which Loria claims his true intentions (not sure if its true or not).

 

You may want to pay particular attention to the paragraphs about the violation of the CIM-18 document plan and the mandatory cash calls that violated Loria's promise to the owners. Also that he threatened to sue MLB if they didn't let him move the team.

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I'm an Expos fan so of course I'm biased in favor of the former limited partners, but there is more to this case than you think.

 

Read the official document here.

 

Also, reports yesterday on Montreal radio said there is some shocking videotape in which Loria claims his true intentions (not sure if its true or not).

 

You may want to pay particular attention to the paragraphs about the violation of the CIM-18 document plan and the mandatory cash calls that violated Loria's promise to the owners. Also that he threatened to sue MLB if they didn't let him move the team.

The court document is pretty clear in how it tries to paint Loria & Co. as the guilty ones, but then tell the story of how Brochu (mad frenchman) sold off the team and how the "plaintiffs" did not meet the conference calls of Baseball Expos (Delaware company).

 

They went to arbi to avoid being in court because they would be thrown out.

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BTW, the franchises were not traded for. The Florida Marlins, LLP still is alive and well, owned by Loria. It leases it's facilities to the Baseball Expos company and Loria owns the current Marlins facilities.

 

Montreal will not be able to trade back this franchise. The plaintiffs are trying to get paid off, get a high value franchise and farm system, and ruin Loria all in one screwing and at minimal cost.

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I'm an Expos fan so of course I'm biased in favor of the former limited partners, but there is more to this case than you think.

 

Read the official document here.

 

Also, reports yesterday on Montreal radio said there is some shocking videotape in which Loria claims his true intentions (not sure if its true or not).

 

You may want to pay particular attention to the paragraphs about the violation of the CIM-18 document plan and the mandatory cash calls that violated Loria's promise to the owners. Also that he threatened to sue MLB if they didn't let him move the team.

thank you very much for posting that document.

 

i skimmed it over and learned quite a bit about the story.

 

as of the july 2000 filing, the limited partners were asking for the following:

 

PRAYER FOR RELIEF

WHEREFORE, plaintiffs demand judgment against defendants as follows:

(a) compensatory damages in an amount to be determined at trial, for defendants? violations of RICO, plus treble damages, attorneys? fees and costs of this action, all provided by statute as a result of defendants? violations of 18 U.S.C. ? 1962;

(b) compensatory damages in an amount to be determined at trial, for the frauds committed by the Loria Defendants and Defendants Selig, DuPuy and theOCB;

(c ) compensatory damages in an amount to be determined at trial, for the MLB Commissioner Defendants? breaches of fiduciary duty and negligent misrepresentations;

(d) punitive damages in an amount no less than one hundred million U.S. dollars ($100,000,000);

(e) a constructive trust in favor of plaintiffs with respect to all property of and ownership interest in the Montreal Expos MLB franchise, pending a determination whether the plaintiffs? ownership interests in the franchise should be restored to the position they had prior to December 9, 1999;

(f) injunctive relief prohibiting any sale, relocation, other transfer, or contraction of the Montreal Expos MLB franchise or any ownership interests therein;

(g) all costs of this action, including reasonable attorneys? fees; and/or

(h) such other and further relief as this Court shall deem just and

proper.

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Actually, they did not choose arbitration to avoid going to court. There will still be a trial by jury, but it is on hold until the arbitration hearings with Loria are held. Even if they lose the arbitration, the lawyers maintain they have more charges than just fraud which they will lay on during the actual trial. The arbitration does not deal with the claims against MLB either, just the Loria portion. The Expos primary lawyer, Jeffrey Kessler, was happy about the arbitration hearings before the trial because the judge said they would still be able to get an injunction if MLB tries to eliminate or relocate the team, which was their primary concern.

 

As far as the cash calls, that is a major part of their case. According to the former owners, Loria had promised them there would not be additional cash calls for several years, after which they would have brought in new business partners from both the United States and Quebec. Instead, Loria issued cash calls immediately (that were apparently only issued to dilute the shares, not because of the necessity for more funds). That whole dilution clause is also a topic for debate, as MLB and Loria forced it into the agreement.

 

Whatever happens, it likely won't affect the Marlins much if at all. But it could bring terrible publicity to Loria and especially MLB/Bud Selig, who is the real person at blame here.

 

CapeFish, in your last reply you wrote something that confused me a bit. I'm not sure if it was what you meant, but the plaintiffs are in no way trying to take over the Marlins. They want money and control of the Expos again, they have no interest in Florida.

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As the general managing partner (despite being a minority owner of the Expos), Loria had the power to demand money from the other owners. If they chose not to pay it, Loria could put up the money himself and take control of their shares in the team.

 

That's how he was able to acquire about 94% of the Florida Marlins for a measly $30 million.

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I'm an Expos fan so of course I'm biased in favor of the former limited partners, but there is more to this case than you think.

 

Read the official document here.

 

Also, reports yesterday on Montreal radio said there is some shocking videotape in which Loria claims his true intentions (not sure if its true or not).

 

You may want to pay particular attention to the paragraphs about the violation of the CIM-18 document plan and the mandatory cash calls that violated Loria's promise to the owners. Also that he threatened to sue MLB if they didn't let him move the team.

 

I realize up in Froggyville (er, I guess I better post this in francais as well or the authorities will be after me, so for all you bilingual terrorists out there - "Ville de Froggy, ay") but a) this filing is old news, b) it represents only one side of the story, it's called a filing and c) it's laughable on it's face.

 

The Toronto Globe and Mail, the most prestigious newspaper in Canada referred to Loria as a "convenient scapegoat" to hide the failings of the minority owners.

 

It would be helpful if the next time you post you try to work the the word "alleged" into your comments, you seem ready to find Loria and company guilty before you've either heard his side.

 

Can you link us to this "shocking videotape" or the radio station that reported on it? Or was this some caller on a call-in show?

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Actually, they did not choose arbitration to avoid going to court. There will still be a trial by jury, but it is on hold until the arbitration hearings with Loria are held. Even if they lose the arbitration, the lawyers maintain they have more charges than just fraud which they will lay on during the actual trial. The arbitration does not deal with the claims against MLB either, just the Loria portion. The Expos primary lawyer, Jeffrey Kessler, was happy about the arbitration hearings before the trial because the judge said they would still be able to get an injunction if MLB tries to eliminate or relocate the team, which was their primary concern.

 

As far as the cash calls, that is a major part of their case. According to the former owners, Loria had promised them there would not be additional cash calls for several years, after which they would have brought in new business partners from both the United States and Quebec. Instead, Loria issued cash calls immediately (that were apparently only issued to dilute the shares, not because of the necessity for more funds). That whole dilution clause is also a topic for debate, as MLB and Loria forced it into the agreement.

 

Whatever happens, it likely won't affect the Marlins much if at all. But it could bring terrible publicity to Loria and especially MLB/Bud Selig, who is the real person at blame here.

 

CapeFish, in your last reply you wrote something that confused me a bit. I'm not sure if it was what you meant, but the plaintiffs are in no way trying to take over the Marlins. They want money and control of the Expos again, they have no interest in Florida.

 

Everyone is to blame except the guys who screwed da pooch in the first place, the minority owners.

 

It's funny how these guys are willing to spend millions on litigation to restore their sullied names and defend their actions, but they were unwilling to come up with the money in the first place to help the Expos when they needed it.

 

A pox on all their houses.

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Caling Montreal Frogville is pretty stupid and unclassy.

 

I believe Loria and Selig conspired to get rid of the Expos. Doesn't mean I'm right, but I think there is definately a chance of the former owners succeeding in court.

 

I did not personally hear the comments about the video tape, but Jeremy Filosa (bilingual media guy in Montreal) was talking about it during his french radio show yesterday. I'm not sure whether this video is the same or something completely different from Paul Beeston's testimony (former COO of MLB I believe).

 

Many of the former owners WERE unwilling to commit money, but the plan they agreed to with Loria was that they would be replaced with new Canadian and American investors. Some of the guys who had $1 million shares (Bronfman, Coutu, etc.) were going to increase their shares, but Loria went back on their agreement and demanded money immediately, including from some guys who were being phased out of the ownership group.

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