Saturday, December 22 Officials wonder if charities best served by the sale Associated Press |
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BOSTON -- The Massachusetts Attorney General is looking into the bidding process by the Red Sox to find out if the team's sale would provide the maximum possible benefit to charitable groups in the state.
Attorney General Tom Reilly said that while he has no regulatory power over the team sale, he does have jurisdiction over public charities, including the Yawkey Trust, which Boston-area newspapers say bypassed a $790 million bid for a lower $700 million offer.
"It is prudent to get the facts so we can determine whether the Yawkey Trust appropriately discharged its fiduciary responsibility to the charities that stand to benefit from the sale of the team," Reilly said in a statement.
The Boston Globe and the Boston Herald, citing unidentified sources, reported that New York lawyer Miles Prentice offered $750 million for the team, plus $40 million in assumed debt.
But the winning bid came from Florida Marlins owner John Henry and partner Tom Werner, the former owner of the San Diego Padres, who offered $660 million and $40 million in assumed debt.
The deal must be approved by at least 75 percent of the 30 major league owners, who could vote on the deal when they meet in Phoenix in mid-January.
Under state charities laws, organizations must take the "full market value" for the sale of their organizations to satisfy beneficiaries, according to Harvard Law School professor Paul Weiler.
"That is a major league legal issue, if that amount of money is riding on it," Weiler told the Boston Herald. "You cannot, in effect, be making a charitable donation at a discounted price to a friend."
Daniel Goldberg, a lawyer for the Red Sox, told The Boston Globe that Prentice's offer contained several major contingencies that made it unacceptable. For instance, he said, Prentice didn't appear to have a final agreement with the Quadrangle Group, a private equity firm expected to help fund his offer. It also referred only to a prospective agreement with an unnamed media company, he said.
"Throughout the process, the Prentice group was repeatedly warned that we could not accept conditional offers and that we needed a clean bid," Goldberg said. "Yet they submitted the offer with major contingencies."
Reilly said he plans to meet with again Red Sox chief executive officer John Harrington to determine the facts in the case.
Baseball commissioner Bud Selig, a close friend of Harrington, defended Harrington's judgment, calling any allegations of political influence on the bidding "ludicrous."
Reilly spokesman Stephen Bilafer said that the inquiry was not the result of any complaints from losing bidders.
"This is something that we foresaw when the team went up for sale," Bilafer told the Globe. "We knew this day would come."
Representatives of the trust said they will cooperate with Reilly.
In the last fiscal year, the trust donated $2 million to dozens of Boston-area charities that support health care, social services, education and youth athletics. |
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