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Expos' former minority partners sue Selig, Loria

Posted: Wednesday, July 17, 2002

NEW YORK -- Baseball's contraction plan sparked another lawsuit Tuesday, with former minority partners of the Expos accusing commissioner Bud Selig with mail fraud and wire fraud.

In a 45-page federal complaint filed in Miami under the Racketeer Influenced and Corrupt Organiza-tions Act, the 14 minority owners accused Selig and former owner Jeffrey Loria of conspiring to eliminate Montreal.

They asked that the Expos, one of the teams threatened in baseball's contraction plan, be placed in trust and said that if baseball officials try to move or fold the team, they would seek an injunction.

''From the beginning of Mr. Loria's involvement with the Expos, he and his co-conspirators engaged in a scheme that had as its object the destruction of baseball in Montreal, so that Mr. Loria and his co-conspirators could justify relocating the franchise to the United States,'' the owners said in the complaint.

They accused Loria and his staff of conduct ''that effectively destroyed the economic viability of baseball in Montreal (that) included removing the Expos from local television, subverting well-developed plans for a new baseball stadium in downtown Montreal, purposefully alienating Expos' sponsors and investors, abandoning agreed-upon financial plans for the franchise, and undermining a planned recapitalization of the franchise that would have added new Canadian partners.''

Bob DuPuy, baseball's chief operating officer, called the suit ''frivolous'' and ''a shameless attempt to obtain through publicity what they know they are not entitled to legally.'' DuPuy said the commissioner's office ''will seek sanctions against those responsible for bringing these baseless claims.''

''They told us that they did not oppose the contraction of the Montreal Expos, as long as they got paid out, but that they did not want public blame for the team's relocation or contraction,'' DuPuy said.

The suit contends Loria and Marlins president David Samson conspired with baseball officials to dilute the minority partners' share of the team from 76 percent to 6-to-7 percent and never intended to keep the franchise in Montreal. Baseball says the partners' share was decreased because they refused to put up additional money Loria asked for in ''cash calls'' permitted by the partnership agreement.

''It is ironic that these partners are now claiming to be so committed to baseball in Montreal when they were unwilling to fund a penny of operating losses since 1991 and instead directed 'fire sales' of players during the 1990s,'' said Loria, who called the claims ''completely without merit.''

Earlier this year, Loria's holding company, which bought a 24 percent controlling interest in the Expos for $12 million in December 1999, sold the team to a company owned by the other 29 major league teams for $120 million and purchased the Florida Marlins from John Henry for $158.5 million -- with the commissioner's office loaning the $38.5 million difference. Henry became controlling owner of the group that bought the Boston Red Sox for $660 million.

''They are better off financially now than they were when they owned a comparable percentage of the Montreal Expos,'' DuPuy said of the limited partners.

The lawsuit asks for compensatory damages, which are tripled in RICO cases, plus at least $100 million in punitive damages. It was assigned to U.S. District Judge Ursula Mancusi Ungaro-Benages, appointed in 1991 by President George Bush, the father of the current President Bush, a former owner of the Texas Rangers.

Defendants in the lawsuit include Selig, Loria, DuPuy, the commissioner's office and Samson, who had been executive vice president of the Expos under Loria's ownership. The partners said they also would file for an arbitration against Loria.

Jim Quinn, one of the lawyers for the limited partners, said Selig had violated criminal wire fraud and mail fraud statutes, but Quinn did not foresee a criminal case, saying, ''Bud is not likely to be walked out in handcuffs.''

Jeffrey Kessler, another of the lawyers for the limited partners, said that document discovery would be a key part of the case and said notices had been sent to baseball ''to make sure the shredders don't get turned on in the next few hours.''

Appearing at the news conference to announce the filing of the suit was Sam Minzberg, a lawyer for the Bronfman family who last month helped oust Jean-Marie Messier as chairman of Vivendi Universal. Charles R. Bronfman, who owned the Expos from the team's inception until 1991, has been close to Selig.

Minzberg accused Selig, Loria and their staffs of ''stonewalling'' the limited partners and said Bronfman had spoken to Selig about the matter.

''He asked the commissioner to do the right thing. He didn't do the right thing,'' Minzberg said. ''We had no choice.''

Bradley Ruskin, a Loria lawyer, said the limited partners ''are trying to wrap themselves in the Canadian flag when it is clear that all they really want is to hold up Mr. Loria and major league baseball for some U.S. dollars.'

''When you adversary feels the need to scream so loudly and engage in such public fanfare, their case is thin as ice,'' said Ruskin, whose firm also represents major league baseball.

Selig and baseball owners tried to fold the Expos and Minnesota Twins during the offseason but contraction was put off until 2003 at the earliest when Minnesota courts forced the Twins to honor their 2002 lease at the Metrodome.

In a settlement of that lawsuit, baseball promised not to eliminate the Twins in 2003. As part of the settlement, none of the documents in that case became public.



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