According to a Reuters report, Guggenheim Partners CEO Mark Walter’s 2012 purchase of the Dodgers might not have been entirely on the up-and-up. The news comes after a class-action complaint was filed in May (and amended in June) claims that Guggenheim Partners has been defrauding investors and insurance company customers.
The lawsuit was filed by Albert Ogles, a customer of Security Benefit life, in a US District in Kansas City. It alleges that investors were left in rough financial positions after they were trapped in bad investment deals while Guggenheim Partners used the funds for their own ends.
One of those ends, allegedly, was the purchase of the Dodgers. Reuters reports Ogles said,
... the alleged scheme included how Guggenheim, Walter, then-Guggenheim president Todd Boehly and Texas oil tycoon Robert “Bobby” Patton Jr used the insurers as a “cash machine” to fund the $2.15 billion Dodgers purchase in 2012.
It continues, “This sum included $1.2 billion ‘financed by policyholder and annuity holder money.’” Which ... doesn’t sound too confidence-inducing, to be honest.
After living with the McCourts’ reign of incompetence for so long, the 2012 transfer of the team to Walter and his ownership group was a welcome change. But it looks like that change of leadership could have some concerning unknowns swirling, a callback to the previous era that wouldn’t be so welcome for fans.
A lawyer for Guggenheim said of the lawsuit, “The allegations are without merit and [we] are going to proceed with a motion to dismiss the case.” If there’s some truth in the lawsuit, there’s more at stake here than just how a baseball team was purchased. But another Dodgers ownership controversy would be a version of history repeating itself that MLB wouldn’t be too excited about.