A gaggle of the Tampa Bay Rays’ minority partners filed swimsuit towards principal proprietor Stuart Sternberg this week, alleging he improperly enriched himself by secretly transferring operational management of the MLB franchise to an entity he managed.
The authorized spat facilities on the minority homeowners’ declare that Sternberg “wrongfully and surreptitiously” transferred authorized possession of the crew in 2020 from an present partnership construction to an entity known as “Rays Baseball Membership.” The companions say they didn’t study in regards to the switch till months after it occurred.
“These actions have stripped plaintiffs of the worth of their long-held investments within the franchise and crew,” the lawsuit says.
The minority homeowners taking part within the lawsuit towards Sternberg are listed because the MacDougald Household Restricted Partnership, Stephen Waters, a belief in Waters’ title, Robet Kelinert and Gary Markel. They collectively personal lower than 10% of the Rays franchise.
The Rays minority companions are suing Sternberg for violation of Florida’s Unfair and Misleading Commerce Practices Act and unjust enrichment and fraudulent switch.
The lawsuit alleges, amongst different claims, that Sternberg and the Rays Baseball Membership entity did not disclose a $376 million cost from regional broadcast associate Fox Sports activities Solar, which was “acquired after the possession of the membership and franchise had been transferred out of the partnership and into RBC.”
The companions accuse Sternberg of getting “deliberately hid” the existence of the Rays Baseball Membership entity.
“The impact of all of that is that the partnership has been lowered to a mere shell, with no revenues from baseball-related operations, no money circulation, and no duties of the administration of the Rays crew and franchise to the restricted companions – the very cause the restricted partnership was fashioned,” the lawsuit stated.
The Rays and an MLB consultant declined to touch upon the lawsuit.
“What was represented as merely shifting property to an entirely owned subsidiary was actually a focused and hid plan to remove our shoppers particular person rights, whereas permitting each RBC and Sternberg broader rights than these supplied underneath the partnership settlement, necessitating this lawsuit,” stated Courtney Fernald, a member of the authorized crew representing the minority homeowners and managing associate at Englander Fischer.
The Athletic was first to report on the lawsuit.
The newest submitting marked the third time this 12 months that the minority homeowners have sued Sternberg throughout an escalating authorized battle over management of the Rays.
The identical companions additionally sued Sternberg in Might 2021 and accused him of participating in a long-running “scheme to squeeze out the restricted companions” and seize full management of the franchise, the Tampa Bay Times reported.
The Rays rank among the many least beneficial MLB groups, with an estimated valuation of $1.1 billion according to Forbes’ calculations.
