Thom Loverro - Angelos boys will not be allowed to own Orioles

[ThomasTomasz]

23 hours ago, O's are Legends said:

A lot of people aren't like their fathers; I don't see why John and Lou would be bad owners like Peter. The O's are trading with the Yankees, just brought on Eddie Murray and Brooks Robinson as special advisors, are finally allowing DD to venture into the international draft, brought on a new business COO, have added free seats for children, rumored to be in the running for Victor Victor Mesa. I'm not saying John and Lou will be saviors but I'm ready to give them a proper chance after all the meddling their father has done.

If the O's are doing well, it's better for baseball as a whole. I'm sure when necessary, this MASN situation will be resolved.

And the business COO was hired to replace John Angelos at that position.  Previously, John reported to his father about the business side, and Duquette reported to him about the baseball side.  With that hire and pulling John into a position where he could oversee the entire operation, I see them preparing for the sons to inherit the team, with John focused primarily on the Orioles and Lou helping and also running the law firm.  They have also poked around to see if they can settle the MASN dispute as well, which is the big thing blocking them outside of whether or not they can weather the taxes on the club that they inherit.  

[weams]

"I intentionally omit him from this, my Last Will and Testament, as I have provided for him during my lifetime in my Declaration of Trust."

[mdbdotcom]

4 minutes ago, weams said:

"I intentionally omit him from this, my Last Will and Testament, as I have provided for him during my lifetime in my Declaration of Trust."

What?

[Ohfan67]

43 minutes ago, mdbdotcom said:

What?

Burt Reynolds left the Angelos boys out of his will. 

[weams]

Just now, Ohfan67 said:

Burt Reynolds left the Angelos boys out of his will. 

Intentionally. 

[Ohfan67]

24 minutes ago, weams said:

Intentionally. 

Spite is an ugly emotion. 

[weams]

2 hours ago, Ohfan67 said:

Spite is an ugly emotion. 

The Entire inheritance was placed in a trust format while living. Avoiding inheritance taxation. Not spite. 

[mdbdotcom]

1 hour ago, weams said:

The Entire inheritance was placed in a trust format while living. Avoiding inheritance taxation. Not spite. 

It also avoids probate, so he has them right away. 

[Ohfan67]

3 hours ago, weams said:

The Entire inheritance was placed in a trust format while living. Avoiding inheritance taxation. Not spite. 

Not including the Angelos brothers was spiteful. 

[weams]

6 hours ago, Ohfan67 said:

Not including the Angelos brothers was spiteful. 

 

[gmelson26]

On 7/29/2018 at 1:12 PM, spiritof66 said:

I've posted at length on this subject. There are a lot of misconceptions in this thread, and I'll try to correct some of them.

Every MLB owner (or group of owners) owns a franchise subject to the MLB constitution (link below). Peter Angelos owns a controlling interest in the Orioles, something like 80 to 90 percent. I am virtually certain there's no joint ownership with his wife and no trust or other complex device involved.

Under Article V, Section 2(b) (on pages 7 and 8 of the constitution) an owner does not have the right to transfer his controlling interest in a franchise. If Angelos transfers his interest in the Orioles, whether by selling it or by having his will or testamentary trust bequeath it to his widow, his sons or anyone else, that transfer requires the approval of 3/4 of MLB teams (the Orioles and 22 others), or a majority (the Orioles and 15 others) for a transfer upon his death to his widow or son(s).

I have explained at length in other posts why I believe there's a very good chance the owners, with the encouragement of MLB, will not approve a transfer to another Angelos. MLB wants a few principal things in an owner: (1) a willingness to go along with the majority view, without challenging the status quo or rocking the boat (especially in public), (2) financial strength to fund the franchise, even if there's a financial turndown in MLB's fortunes. and (3) the avoidance of "distressed" franchises like those in Tampa and Oakland (or any other problems with the transferred franchise that might lead to a relocation or undercut the value of other teams). 

Proposed ownership by another Angelos would not do well by any of these criteria.

Peter Angelos has been a difficult and at times publicly obstreperous member of the owners' club. He has criticized MLB positions and practices, opposed the moving of the Expos to Washington and threatened to sue over it, and did sue MLB over the arbitration award in the rights fee dispute (and there's been plenty of name-calling in connection with that dispute). I believe there's plenty of genuine animosity between Angelos and the Commissioner (as there was with his revered predecessor). Why would the owners or MLB believe his sons would be very different? 

The inheriting Angeloses would be in a cash-poor situation, with a team whose cash generation from ticket sales and MASN is diminishing relative to other teams'. To be brief, Peter Angelos's estate will need to come up with what I estimated to be something like $500 million (the figure is from memory) to pay federal and Maryland estate taxes, leaving the Orioles with very limited working capital to build a successful team -- including increased investment in an international infrastructure, the front office and scouting -- in MLB's most challenging environment. If Angelos were to leave the team to his widow, those estate taxes would be deferred until after her death, but that would only put off the problem, not solve it, while putting ownership in the hands of someone with no business experience at all, so far I'm aware. (When I looked into this, I was unable to find anything about her age or health.)

The crappy on-field performance of Peter Angelos's team, and his transparent failure to invest adequately in the future of the franchise, have undermined the strength of the Baltimore franchise. MLB and the other owners don't want to see that franchise fail to thrive financially, have to move out of an established MLB city and desert one of the game's best facilities, or sell at a fire-sale price. (While I still tend to think of Baltimore as a "new" MLB city, at age 64 it's #6 in AL longevity. Cue up Paul McCartney and his pals.) I would guess that in the 25 years that Angelos has owned the team, the term "laughingstock" has been applied to the Orioles more than to any other franchise. If I were an owner, I would look at a proposed transfer to another Angelos as a further step in an erosion of the franchise's stability, an unhealthy development for the value of my own asset.

Each of these factors -- and there are probably more -- provides a logical reason for 15 or more owners to turn down a proposed transfer of the Orioles within the Angelos family. And under the MLB constitution they don't need to have any reason at all. There have been posts (including one in this thread) suggesting that the Angeloses would have a claim for damages against someone (MLB? The owners? The Commissioner?) if the owners turned down an inter-Angelos transfer, but so far as I'm aware nobody ever has explained what that claim might be. Having spent a chunk of my adult life thinking about contract provisions similar to the governing provision in the MLB constitution, I can't imagine what that would be -- unless the transfer could be said to have been turned down on the basis of unlawful discrimination (on grounds like race, gender or national origin) or there's some quirk of Maryland law I'm not aware of. And I don't think a vague threat that an Angelos might sue them for doing something they're entitled to do will deter the other owners from doing what they want to do.

Obviously, I don't know whether the owners would approve of a transfer of the Orioles to another Angelos. But I wouldn't be the least bit surprised to learn that MLB has prepared a dossier documenting Peter Angelos's transgressions, or that, as reports of Angelos's declining health circulate, the Commissioner, his MLB minyans or one or more owners are preparing for a request to approve a transfer to a family member(s) and for their opposition to that request. They may be lining up their votes, or may already have their 15 votes and are just waiting for nature to run its course.

http://www.law.uh.edu/assignments/summer2009/25691-b.pdf

Ok so let's go along with a hypothetical.. Petey dies and leaves the club to sons (or wife), and MLB does not approve of this transaction.  What happens then?

Who owns control of the club?  Does MLB mortgage it off and give the money to the John/Lou?  Is John and Lou forced to choose a buyer with MLB's consent?  If John/Lou sue MLB for denying the transfer and there is a drawn out legal battle, does the team keep functioning like normal?

[spiritof66]

2 hours ago, gmelson26 said:

Ok so let's go along with a hypothetical.. Petey dies and leaves the club to sons (or wife), and MLB does not approve of this transaction.  What happens then?

Who owns control of the club?  Does MLB mortgage it off and give the money to the John/Lou?  Is John and Lou forced to choose a buyer with MLB's consent?  If John/Lou sue MLB for denying the transfer and there is a drawn out legal battle, does the team keep functioning like normal?

The ownership of Peter Angelos's 80-85 percent of the partnership that owns the Orioles (I think that's approximately the amount he now owns) after Angelos's death would be pretty clear, once you look at his will. Let me explain.

When Angelos or you or I die, ownership of the assets owned by the deceased passes automatically to a legal entity called the estate of that person. That estate is also responsible to pay off the deceased's debts. If that person left a valid will, the will states who gets what assets. The will can state who is in charge of administering the estate (an executor or more than one executors), paying its debts and giving out its assets according to the will; if there's no executor named in the will or the named executors isn't available, the state probate court will appoint one.

There are two main ways a will can provide for the distribution of assets. My will might direct that specified amounts be given to specified charities, nieces and nephews, and that my wife and two children will split evenly (1/3 each) the remaining assets. Or my will might contain an inventory of my assets and direct that each be given to a specified person. The executor or executors, as representatives of the estate, sell the assets of the estate that are not specified as going to a particular person, pay off the estate's debts, pay a fee to themselves and the legally required fees and taxes to the federal and state government, and give out whatever is left according to will. For a large, complicated estate, that process will take a while. 

When Peter Angelos dies, his estate will own his interest in the team. If his will specifies that his interest in the partnership that owns the Orioles be given to his sons equally, the executors of his estate -- which might be his sons or another lawyer or someone else -- would ask, on behalf of the estate, for the consent of MLB owners to the transfer to John and Lou, as required in the MLB Constitution. If the estate doesn't get the required consent (a majority of MLB's teams), the estate could do one of two things: sell Peter's interest in the Orioles and distribute the proceeds of the sale to his sons (after paying off all the estate's debts and taxes and fees), or sue the other owners for wrongfully withholding their consent to having ownership of Peter's interest in the Orioles pass on to his sons. (Though, as I've said several times, I have no idea what the legal basis for a lawsuit against the owners would be.) 

During the time the estate retains ownership of the team because there's no consent to transfer the team, the estate would run the team, but the executors would have a duty to sell within a reasonable time, whatever that be. While looking for a buyer, the executors (which could be John and Lou) might run the team themselves or hire competent people to run it, and those persons would be paid by the estate. During the time the estate maintains its ownership, the estate would both receive proceeds and pay expenses of the team. It's unclear how much time they might take, but if they screw around the Commissioner might be able to terminate the franchise under Article VIII of the MLB Constitution. That could lead to a situation where MLB takes over of the team, sells it and gives the net proceeds (after the team pays costs that are referred to in the Constitution) to John and Lou -- almost certainly not as good a result for them as if the estate sold the team earlier.

A few qualifications. There are some other details and variations for different ways in which Peter Angelos might pass on his assets. I don't know what would happen to the minority interests in the Orioles since I haven't seen the agreements and what they provide upon Peter Angelos's death. And there might be odd provisions of Maryland law that would affect some of this and with which I'm not familiar.

But the main point is this. If Peter Angelos owns shares of Apple stock, he can do whatever he wants with them while alive, and he can leave a will directing that when he dies that stock can be disposed of however he likes. Peter Angelos's ownership of some 80-85 percent of the Orioles is different. His ownership is subject to limits on transfer in the MLB Constitution, and those limits would apply to his estate after his death. 

  

[mdbdotcom]

So, the boys need to improve the family's relationship with MLB before PGA makes his final exit.

[spiritof66]

17 hours ago, weams said:

The Entire inheritance was placed in a trust format while living. Avoiding inheritance taxation. Not spite. 

I'm not sure what this comment is about. But a trust created during Peter Angelos's lifetime that transfers assets upon his death will not avoid estate and inheritance taxes.  Congress can be dumb, but not that dumb.

[spiritof66]

4 minutes ago, mdbdotcom said:

So, the boys need to improve the family's relationship with MLB before PGA makes his final exit.

I think that's basically right. They would have some time afterward before making the request for the owners' consent. But I have no idea how much.