A bunch of the Tampa Bay Rays’ minority companions filed swimsuit towards principal owner Stuart Sternberg this week, alleging he improperly enriched himself by secretly transferring operational control of the MLB franchise to an entity he managed.
The authorized spat facilities on the minority house owners’ declare that Sternberg “wrongfully and surreptitiously” transferred authorized possession of the team in 2020 from an present partnership structure to an entity known as “Rays Baseball Club.” The companions say they didn’t study concerning the switch till months after it occurred.
“These actions have stripped plaintiffs of the value of their long-held investments in the franchise and team,” the lawsuit says.
The minority house owners collaborating within the lawsuit towards Sternberg are listed because the MacDougald Family Limited 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 Deceptive Trade Practices Act and unjust enrichment and fraudulent switch.
The lawsuit alleges, amongst different claims, that Sternberg and the Rays Baseball Club entity didn’t disclose a $376 million fee from regional broadcast associate Fox Sports Sun, which was “received after the ownership of the club and franchise had been transferred out of the partnership and into RBC.”
The companions accuse Sternberg of having “intentionally concealed” the existence of the Rays Baseball Club entity.
“The effect of all of this is that the partnership has been reduced to a mere shell, with no revenues from baseball-related operations, no cash flow, and no responsibilities of the management of the Rays team and franchise to the limited partners – the very reason the limited partnership was formed,” the lawsuit stated.
The Rays and an MLB consultant declined to touch upon the lawsuit.
“What was represented as merely moving assets to a wholly owned subsidiary was in fact a targeted and concealed plan to eliminate our clients individual rights, while allowing both RBC and Sternberg broader rights than those provided under the partnership agreement, necessitating this lawsuit,” stated Courtney Fernald, a member of the authorized team representing the minority house owners and managing associate at Englander Fischer.
The Athletic was first to report on the lawsuit.
The newest submitting marked the third time this year that the minority house owners have sued Sternberg throughout an escalating authorized battle over control of the Rays.
The similar companions additionally sued Sternberg in May 2021 and accused him of partaking in a long-running “scheme to squeeze out the limited partners” and seize full control of the franchise, the Tampa Bay Times reported.
The Rays rank among the many least useful MLB groups, with an estimated valuation of $1.1 billion according to Forbes’ calculations.