Friday, April 19, 2013

Mediation Confidentiality upheld in Dodgers Divorce

This week, Delaware U.S. Bankruptcy Judge Kevin Gross (who reportedly initiated a 2011 mediation between the bankrupt Los Angeles Dodgers and Major League Baseball) blocked former Dodgers owner Frank McCourt's ex-wife from obtaining confidential mediation documents she sought to convince a California court to reconsider her $131 million divorce settlement. Discovery requests seeking documents developed during the mediation process were ordered withdrawn, as such information was found to remain confidential under prior orders, as well as local rules. The judge enforced conditions that confidential documents provided to the mediator are privileged and are not to be produced. The original order appointing the mediator laid out that documents produced could not be used in any other forum. The divorce was based on a $294 million valuation of the Dodgers and other assets. However, the bankrupt team was sold last year for a record $2 billion to an investors led by Magic Johnson. Counsel representing the Dodgers and MLB's commissioner argued that confidentiality promised by the meditation order must be upheld. Judge Gross attributed success of the deal to the nature of the mediation process itself, which allowed parties in a highly visible case to negotiate confidentially. Mrs. McCourt's move to obtain information amounted to an “attempt to invade the mediation process,” Judge Gross said, and was “frankly, shocking to the court's conscience.” Limitations, however, include documents that are otherwise discoverable and not immune to discovery simply because they were submitted to the mediator. See story here- See also, In re: Los Angeles Dodgers LLC et al., case number 1:11-bk-12010, in the U.S. Bankruptcy Court for the District of Delaware.