In October of 2011, former Los Angeles Dodgers owner Frank McCourt and his wife, Jamie McCourt, who served as the Dodgers' CEO reached a divorce settlement agreement. Pursuant to the terms of the agreement, Jamie McCourt received $131 million tax-free as well as, ownership of several properties.
However, Jamie McCourt recently filed claims alleging that her former spouse committed fraud by misrepresenting the Dodger's assets. According to court documents, the misrepresentation resulted in her agreeing to a settlement that was nearly $770 million lower than what she was entitled too. She is back in court seeking a larger settlement.
Jamie McCourt states that Frank McCourt provided her with financial documents which indicated that the Dodger's assets were valued at less than $300 million, when he knew that their true value was much higher. The information provided to Jamie McCourt did not include the value of a future regional sports network, projected to enhance the team's value by $1 billion.
According to Franck McCourt's attorney, Jamie McCourt was provided with details regarding plans to build a regional sports network, but that it wasn't listed as an asset because it was not yet in existence. Frank McCourt's attorney argues that Jamie McCourt was provided with the Dodger's most up-to-date financial documents before settlement was reached and that she failed to do her due diligence prior to agreeing to settlement. During trial, Frank McCourt's attorney stated that there was no evidence to support Jamie McCourt's claims of fraud.
In late April, Jamie McCourt testified that she was under the impression that she and Frank McCourt were splitting their assets equally. Jamie McCourt stated that she was surprised to learn that the Dodgers were worth more than she was led to believe when the team sold for $2 billion after the couple's divorce was finalized.
A ruling in this case is not expected until later this summer. However, if the presiding Judge tosses out the divorce settlement, the former couple will resume previous arguments regarding whether the Dodgers were community property under California law or if they solely belonged to Frank McCourt.
Financial Information Frequently Hidden in Divorce
An article published in Forbes magazine late last year revealed that partners routinely hide assets from each other, including during divorce proceedings. According to a study by the National Endowment for Financial Education, 58 percent of spouses report hiding case from their partners and 34 percent admitted to lying about their finances, debt, or earnings.
Misrepresenting information in a Financial Affidavit that is filed with the court in a divorce proceeding is illegal and can result in serious penalties.