Sale of Orioles could be final in mid-July if judge gives OK

June 12, 1993|By Mark Hyman | Mark Hyman,Staff Writer

The sale of the Orioles could be wrapped up by mid-July, when a bankruptcy judge in New York is expected to hold a final hearing and pick the new owners of the team.

Judge Cornelius Blackshear has already received one proposal for the Orioles. In papers filed in court yesterday, owner Eli S. Jacobs asked the judge to approve a sale for $141.3 million to buyers led by Cincinnati businessman William O. DeWitt Jr.

Four other groups, including some Baltimore investors, say they want to buy the team, and they could file offers with the judge any time before the mid-July deadline, according to sources familiar with negotiations surrounding the sale of the Orioles.

Mr. Jacobs, in a statement released yesterday, said the judge will schedule a hearing to sell the team in mid-July. At that time, the court either will approve a sale of the team to the DeWitt group or look to another offer that is "higher and better," the statement says.

While Mr. Jacobs and his creditors hope to sell the team next month, that decision ultimately rests with the judge. It's not clear whether he will agree to the sale process proposed by the Orioles owner and his lenders.

But time is short because the DeWitt group's offer for the team is good through July 15. At that time, the investors could withdraw their offer without a penalty, according to the papers filed in U.S. Bankruptcy Court for the Southern District of New York.

In the court filings, Mr. Jacobs, who filed for bankruptcy court protection two months ago, reveals many details about his efforts to sell the team and his negotiations with potential buyers, including Mr. DeWitt. In his four years as majority owner, Mr. Jacobs has seen team profits rise to record levels, in part because of the Orioles' move last year to the new stadium at Camden Yards. He is almost assured of getting double the $70 million that he paid for the team in 1989.

In the spring of 1991, the documents say, Mr. Jacobs retained J P. Morgan Securities Inc. to help him evaluate offers to buy the Orioles. Beginning in June 1991, Morgan had contacts with potential investors seeking to buy "all or a portion of . . . the Orioles," according to the papers.

Morgan was seeking bids of $200 million for the team.

After considering several options, Mr. Jacobs decided to tal more seriously with Mr. DeWitt, the papers say, and the Cincinnati investors made their first offer for the team in August. The documents don't say how much Mr. DeWitt initially offered.

According to the documents, a contract to sell the Orioles to the DeWitt group was completed in December. It then circulated among the owner's creditors, whose approval Mr. Jacobs needed because he had defaulted on loans and needed the lenders' cooperation to work out his financial problems. The sale contract still hadn't been approved by all the parties when Mr. Jacobs wasforced into bankruptcy by impatient creditors this spring, halting the talks.

In the papers filed yesterday, Mr. Jacobs asks the court to approve the terms of his contract with the DeWitt group, including a provision that the Orioles can be sold to a competing group that offered to pay more for the team. If that happens, Mr. Jacobs asks the court to authorize payments to the DeWitt investors of up to $3.25 million.

After he pays off secured debts -- those backed by collateral -- Mr. Jacobs' proceeds from the sale will exceed $40 million, virtually all of which is likely to be distributed among his creditors.

Mr. Jacobs' lawyers are lavish in their praise of the Orioles in thecourt documents, which they refer to as "one of the best established and most successful organizations" in pro sports. "The Orioles are widely recognized to have superior management, and revenues have substantially increased with improved attendance over the past four years," the papers say.

Through his spokesman, Mr. Jacobs released a two-page statement yesterday summing up his years as owner and heaping praise on the DeWitt investors.

"I am proud of the Orioles and believe the club and the community have benefited enormously by the new ballpark which we helped to build for the team. I am also pleased that the DeWitt . . . group will be as committed as I have been to building this great sports franchise and retaining its home in Baltimore at Oriole Park at Camden Yards."

To increase his group's appeal to Major League Baseball, which favors local ownership and must approve any sale, Mr. DeWitt yesterday revealed names of Maryland investors who he said have joined his effort.

They include: Leslie Disharoon, former chairman and president, Monumental Corp.; John Claster, president of Claster Television Inc.; John H. LaPointe and James S. Riepe, managing directors of T. Rowe Price Associates Inc.; and Bruns Grayson, an executive at Alex. Brown & Sons. Mr. DeWitt added that Alex. Brown intends to make a corporate commitment.

Mr. DeWitt said he hoped ultimately to have 18 to 20 investors i the group. None of the current members are black, but he said that the addition of minority members would be "desirable." Major League Baseball has come under criticism for its lack of minority owners.

"We always intended to have local people in the group. We've said that from Day 1," said Mr. DeWitt, who added that the local investors would have "a great deal of control over major decisions involving the franchise."

But a competing group, led by Baltimore attorney Peter G. Angelos, dismissed that claim. "The control of the club will reside in Cincinnati, Ohio. The control of the Orioles belongs in Baltimore," Mr. Angelos said.

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