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Arbitration Ruling Effectively Ends Loria Rico Suit
Published November 16, 2004
|Loria Wins Arbitration Case Brought
By Former Expos Minority Partners
A three-judge arbitration panel in N.Y. yesterday unanimously ruled against 14 former Expos limited partners in their hearing against former limited partner Jeffrey Loria, according to Jeff Blair of the Toronto GLOBE & MAIL. As a result, the partners “will drop their bid for an injunction aimed at preventing the Expos’ move to Washington.” While the group can still pursue its federal RICO lawsuit, which was put on hold and sent to arbitration, attorney Jeffrey Kessler said, “It’s very unlikely we will proceed with our ... case. These findings bind us, and the arbitrators have ruled there is no fraud or breach of fiduciary duties.” The panel ruled that the partnership was “a marriage built on hope, not realism,” adding, “Neither side can be blamed for the divorce that ensued.” The judgment also said the limited partners’ “sense of betrayal, even if justified, does not amount to fraud” by Loria, who is now the Marlins’ Managing General Partner. The ruling stated the “claimants find it objectionable that Loria was able to acquire 92[%] of the club for only $35-40[M], but claimants have themselves to blame. The record establishes that claimants would not have met the capital calls under any scenario, there was nothing material undisclosed, and claimants knew the gist of what they say was concealed” (Toronto GLOBE & MAIL, 11/16).
DETAILS: In addition to Loria, the RICO suit names Marlins President David Samson and MLB Commissioner Bud Selig, accusing the trio and others “of violating federal racketeering laws, mail fraud and wire fraud in an attempt to eliminate the Expos.” The limited partners said that their 76% share of the Expos became a 6-7% stake in the Marlins after Loria acquired the team (TORONTO STAR, 11/16).
REAX: MLB Senior VP & General Counsel Thomas Ostertag: “It has been this office’s position since the commencement of the litigation and arbitration that this was merely a partnership dispute, and that attempts to include this office and the Commissioner were particularly malicious and frivolous” (Ft. Lauderdale SUN-SENTINEL, 11/16). Loria’s attorney, Brad Ruskin, called the action “a case about people entering a contract and deciding afterward that they didn’t like it” (Toronto GLOBE & MAIL, 11/16).
THE NEXT STEP: In DC, Svrluga & Heath report the ruling “allows MLB’s owners to formally vote on the relocation” of the Expos during a meeting in Chicago on Thursday. Expos President Tony Tavares, on the suit: “In its worst-case scenario, it could have prevented the move. But I don’t think anybody believed that was going to happen. For us, we just keep moving forward” (WASHINGTON POST, 11/16).