Bank goes after Jacobs' 'wages' from the Orioles

January 14, 1993|By Mark Hyman | Mark Hyman,Staff Writer

Two months after winning a $4.6 million judgment against Eli S. Jacobs, a New York bank hopes to collect by going after money owed to the Orioles owner by the team.

In papers filed in Baltimore Circuit Court, Manufacturers & Traders Trust Co. says its judgment against Mr. Jacobs, principal owner of the Orioles, remains "unpaid in whole." The debt is from a delinquent loan.

The Orioles were notified of the action Tuesday and are required to respond in 30 days.

The bank's action comes as Mr. Jacobs is said to be discussing a sale of the team with a group of investors led by Cincinnati businessman William O. DeWitt Jr. Mr. Jacobs, whose business empire has run into trouble, offered the team for sale two years ago, but the names of potential buyers emerged only recently.

Mr. Jacobs has several sources of revenue from the team. They include a management fee to his New York investment firm, E.S. Jacobs & Co., and his annual share of the Orioles' profits. He doesn't draw a salary, a spokesman for the owner said.

But the New York bank's court filing specifically seeks Mr. Jacobs' Orioles "wages." Because of that language, the bank could gain little or nothing, said Joel Sher, a lawyer at Shapiro and Olander who specializes in bankruptcy proceedings.

"If they are not paying him regular wages, the Orioles can file a response saying only that," he said.

Another bankruptcy attorney, James A. Vidmar of Linowes and Blocher, said the bank could argue that other forms of payment should be considered wages.

Bernard J. Casserly, an M&T vice president, declined to discuss the bank's reasons for asking for Mr. Jacobs' wages except to say that the bank was "trying to find out" whether Mr. Jacobs receives a salary from the team.

Manufacturers & Traders isn't the first of Mr. Jacobs' creditors to look to the Orioles for money. Baltimore's Mercantile-Safe Deposit & Trust Co., which sued the owner to collect a $21.6 million debt last August, froze payments that Mr. Jacobs receives from the Orioles. Another court order froze Mr. Jacobs' assets in three New York banks: Morgan Guaranty Trust, Chemical Bank and Citibank, N.A.

Mr. Jacobs, a New York financier with diverse business holdings, has been hit with a series of legal and financial setbacks in the past year. Including Mercantile and M&T, four banks took legal action against him last year. In all, he is accused of defaulting on $42 million in loans and personal guarantees to the banks and a group of private investors.

Last July, he notified some lenders that he would not be making interest payments on some loans. He asked that they work with him as he attempted to restructure his investments.

The action by Manufacturers & Traders could indicate the efforts to reach a settlement on the debt have broken down. But the parties did not agree on that yesterday.

Mr. Jacobs' spokesman said settlement talks with the New York bank are "proceeding."

Mr. Casserly at Manufacturers & Traders painted a different picture, however, saying that the bank is no longer holding talks with Mr. Jacobs.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.