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LA Dodgers Secret Deal Can’t Be Used in Divorce: Judge

April 15 (Bloomberg) -- Secret Major League Baseball documents concerning the $2 billion sale of the Los Angeles Dodgers can’t be used by former team owner Frank McCourt’s ex-wife to challenge their divorce settlement, a judge ruled.

Any documents written for use during confidential mediation sessions between the Dodgers, Frank McCourt and league officials will remain secret, the judge who oversaw the team’s bankruptcy ruled today. By seeking to obtain the documents, Jamie McCourt tried to evade a federal bankruptcy court order to keep the mediation confidential, said U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware.

“This is my order and I am enforcing it because it was an essential ingredient in the success” in ending the Dodgers’ bankruptcy, Gross said.

The Dodgers left bankruptcy last year after Frank McCourt sold the team for a record $2 billion to a group including Guggenheim Partners and its top executive Mark Walter and ex-basketball player Magic Johnson.

After the team was sold, Jamie McCourt filed court papers saying her $131 million divorce settlement was based on fraud and asked that it be set aside. In her request, McCourt, who is an attorney, said Frank McCourt declared under penalty of perjury in August, 2001 that the fair market value of their assets was less than $300 million.

Sale Price

About six months later, the team was sold for more than $2 billion.

Frank McCourt and the league struck a deal in mediation that Gross said led to the successful sale. The most important part of that deal involved a set of special terms governing the auction of the team. MLB considered the special terms so secret that they were never made part of the team’s bankruptcy or submitted to Gross for his approval.

Attorneys for the Dodgers and the baseball league were in court today to ask Gross for an emergency ruling to keep the special terms and any other mediation documents from being used by Jamie McCourt to reopen her divorce case.

The case is In re Los Angeles Dodgers LLC, 11-12010, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Steven Church in Wilmington, Delaware at schurch3@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net

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