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04.09.10

California's Most Expensive Divorce?

Frank and Jamie McCourt’s nasty split could be the priciest in state history, with ownership of the Los Angeles Dodgers, several lavish homes, and spousal support of $1 million a month up for grabs. Kim Masters reports on the bruising battle.

When Jamie McCourt was a little girl of 8 or 9, she told her mother that one day she was going to own a baseball team.

Her dream came true—and turned into a nightmare. Jamie and Frank McCourt are locked in the World Series of divorce cases. Among the big-ticket bones of contention is ownership of the Los Angeles Dodgers.

“With respect to their ‘lifestyles,’ the many houses are all Jamie’s,” Frank’s lawyers said. “She is presently ‘occupying’ four homes in the Los Angeles area alone. Frank lives in a hotel.”

There are smaller issues, too. After a bruising battle, Frank only just got to retrieve clothes and photos from one of the couple’s homes, in Holmby Hills near the Playboy Mansion, as attorneys for both sides looked on. Meanwhile, last month, TMZ captured Jamie, who was chief executive of the Dodgers organization until Frank fired her, attempting to enter Dodger Stadium to fetch her belongings.

Flanked by videographers and a couple of her lawyers, including super-litigator David Boies, Jamie planned to tape her sprawling, glass-walled office overlooking the third-base line before packing up the contents, including a collection of baseball caps signed by baseball legends Sandy Koufax and Brooks Robinson, among many other Major League stars. She was denied entry; Frank had her things delivered to her lawyer’s office.

After 30 years of marriage, it is an understatement to say things have gotten ugly between Frank and Jamie. She has asked for temporary spousal support of nearly $1 million—a month, that is. Michael Kump, one of her attorneys, says more than half of that sum is needed to cover fixed payments on various McCourt residences. She wants an additional $9 million to help pay her lawyers. By the time it’s done, the Los Angeles Times reports, the divorce case will qualify as one of the costliest in state history.

Frank and Jamie met as students at Georgetown University and married in 1979. They subsequently moved to Boston, where they raised four sons and built up a fortune as real-estate developers. In 2001, the McCourts tried to buy the Boston Red Sox with the idea of building a new stadium on McCourt-owned land. That didn’t work out, but the McCourts fared better in 2003, when they bought the Dodgers and moved west.

Jamie said in court papers that she “lived and breathed the Dodgers.” She rebuilt the front office and “installed a fresh, positive, values-driven culture” in the organization. “I was the face of the Dodgers,” she declared, and took pride in being the highest-ranking woman in Major League Baseball.

With the McCourts now engaged in a very public brawl, the divorce has generated a fair amount of hand-wringing in Los Angeles about the impact on the Dodgers. Frank has said the fallout will be “minimal” though not nonexistent. He has vowed that nothing will disrupt his ownership of the team. “My kids will own the Dodgers someday,” he said. “As we get this matter resolved… things will get back to normal.”

That will take some doing. For months now, Frank and Jamie have been taking turns embarrassing each other. There have been reports of infidelity and disclosures about the over-the-top lifestyles of the rich and famous. More surprising than Jamie’s taste for designer clothes, however, is a revelation about the scope of her ambition. Court papers show that in December 2008, a Dodgers public-relations executive (who has since left the organization) generated a document titled “Project Jamie.” The goal was to get Jamie elected president of the United States, with endorsements from such diverse players as Michelle Obama and Fernando Valenzuela. An email from political consultant Michael Wissot suggested she begin by running for mayor of Los Angeles, then governor of California, and finally commander in chief.

That’s clearly on hold now. By July 2009, the McCourts had separated, and in October Jamie’s husband had fired her—“unceremoniously,” she said—from her $2 million a year job with the Dodgers organization. Frank’s side alleged that Jamie had been having an “inappropriate” relationship with a subordinate, Jeff Fuller, the Dodgers' director of protocol, also described as her driver and security guard.

Since then, Jamie has countered that her estranged husband and his lawyers have made “hurtful and unnecessary personal comments” about her in court filings and suggested that turnabout would be fair play. “I would prefer not to... discuss my belief as to Frank’s extramarital activities,” she said.

Court papers contain the unsurprising information that the McCourts treated themselves to private jets, almost daily visits from hairdressers, and other indulgences. According to one of Frank’s attorneys, among the McCourts’ several homes was one in Holmby Hills used only for its swimming pool (Olympic-size and indoor) and another for storing furniture. Other properties go unused.

Team Frank includes 82-year-old divorce lawyer Sorrell Trope, who has handled marital issues for Cary Grant, Hugh Grant, Nicole Kidman, and Britney Spears, among others. He also has reportedly advised Elin Nordegren in her travails with Tiger Woods. Meanwhile, Jamie has hired enough heavyweights to play a pickup game against the Dodgers. Among them are Boies; veteran divorce attorney Dennis Wasser, who has represented Tom Cruise and Steven Spielberg; and lawyer to the stars Bert Fields.

While the McCourts accumulated great wealth, the case has raised questions about their true net worth. While Jamie has estimated that the couple was worth about $1.2 billion, Frank has portrayed himself as having relatively little ready money. In a filing last November, he said his liquid assets consisted of a bank account with less than $1.2 million. His portrayal of his finances appears to raise questions about ownership of the Dodgers if a court decides that he must buy Jamie out.

A judge is weighing Jamie’s request for temporary support and Frank’s contention that he is getting by on $5 million a year. (Jamie’s lawyers say he can get hold of much more.) Initially Frank wanted to pay no support to Jamie, but at a hearing in March, his lawyers said he could spot her $150,000 a month. Trope said her request for nearly $1 million a month was “obscene” and invoked Marie Antoinette. But Kump counters that both Frank and Jamie were the architects of their lavish lifestyle. “They’re now criticizing her for something that Frank was more than 50 percent of creating,” he says.

Frank’s lawyers responded to inquiries from The Daily Beast by saying in a statement: “With respect to their ‘lifestyles,’ the many houses are all Jamie’s. She is presently ‘occupying’ four homes in the Los Angeles area alone. Frank lives in a hotel. There is no comparison that can be made between the two. We look forward to having these issues resolved at trial to finally put to rest these baseless claims.”

With the support request pending, the challenge for Jamie’s lawyers now is to convince the court to invalidate a legal agreement, signed by Jamie, that gives Frank sole possession of the Dodgers.

According to Team Jamie, she always worried about protecting their homes in the event that their highly leveraged business went south, which sometimes seemed like a looming danger to her. All their residences were put in her name to make it more difficult for creditors to go after them.

After the McCourts bought the Dodgers, Jamie signed a “post-nup” that kept the residences in her name and gave ownership of the team and related assets—including 276 acres around the stadium—to Frank. Kump says Jamie never understood the terms of that agreement. “Jamie’s view was that all the property they acquired in their marriage was theirs together,” he says. She believed that Frank shared her understanding of their agreement, he says, adding that ceding the Dodgers to Frank “is not something she would have ever done.” But he says Jamie “trusted her husband and [their] lawyer to do what they told her they were going to do—to protect the homes.”

At the end of June 2008, however, Kump says Los Angeles estate-planning lawyer Leah Bishop explained to the McCourts that the agreement made the properties separate—so much so that if either died, the surviving spouse would have no access to property held in the other’s name. In a declaration filed in court, Bishop said both Frank and Jamie asked her to revise the deal to make their assets community property. She drew up the papers, but for months Frank kept declining to sign.

Kump says Bishop’s testimony is the key to Jamie’s case. “If two people enter into an agreement and there’s a mutual mistake, there’s been no meeting of the minds and it shouldn’t be legally binding,” he says. Alternately Jamie might argue that she was deliberately misled. Either way, Kump says Jamie never read the post-nup agreement.

Jamie’s own background, however, will be an issue. She has a law degree from the University of Maryland, practiced law until 1992—and even handled some divorces. She served as general counsel to the McCourt Company from 1994 until 2004, staying on in that role even after she decided in 1992 “that the practice of law was not my calling.” At that point, she got an MBA from MIT’s Sloan School of Management.

In response to inquiries from The Daily Beast, Frank’s lawyers said in a statement: “Jamie McCourt is a highly educated lawyer who practiced divorce law. She also has an MBA degree from the Massachusetts Institute of Technology. Her claim that she did not read or understand the marital property agreement before she signed it is absurd. She was not misled by anyone. Her claims to the contrary are specious. The claims of her current lawyer Leah Bishop are also suspect. This lawyer was actually referring Jamie to five different divorce lawyers in 2008 while representing both Frank and Jamie. Neither Jamie nor this lawyer disclosed this to Frank when they were trying to get him to give her an ownership interest in the Dodgers.”

Kump says Bishop gave Jamie the names of divorce lawyers only to provide more clarity on the post-nup and that Jamie did not contact those lawyers until months later—after Frank had declined to sign the revised agreement.

It seems that the brawling will continue in the weeks ahead—in the court of law as well as the court of public opinion. A trial is set for Aug. 30. That’s just when the Dodgers could be battling for the National League West Championship. If they keep their eyes on the ball.

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Kim Masters covers the entertainment business for The Daily Beast. She is also the host of The Business, public radio's weekly program about the business of show business. She is also the author of The Keys to the Kingdom: The Rise of Michael Eisner and the Fall of Everybody Else.