Tuesday, March 09, 1999
Partner's death, timing muddy owners meeting
BY GEOFF HOBSON
The Cincinnati Enquirer
The death of Reds limited partner Carl A. Kroch over the weekend and a dispute over timing clouded Monday's partnership meeting in which Marge Schott unveiled for the first time her plan to sell the club to Cleveland lawyer Larry Dolan.
The two issues may lengthen a process that began in October when general partner Mrs. Schott relented to pressure from Major League Baseball and agreed to take offers for her controlling interest in the club.
While local business leaders continue to expect the limited partners to match Mr. Dolan's $65 million offer for all but one of Mrs. Schott's 6.5 shares, sources close to the deal said Monday at least one limited partner disagreed with her about how much time they would have to match it.
Mrs. Schott and the Reds think the 30 days the limited partners have to match Mr. Dolan's $65 million offer started at Monday's morning meeting at the Queen City Club.
The disagreement apparently stems from the nonbinding letter of intent Mrs. Schott signed with Mr. Dolan. At least one limited partner says the 30-day countdown doesn't start until a formal sale contract is signed.
When four of the limited partners matched a $7 million bid on one share of the club last year, they made the match on a letter of intent from Washington, D.C., businessman Jon Ledecky.
After Mrs. Schott made her presentation Monday, she left the meeting and the limiteds met by themselves. Both parties left the meeting with no comment about the sale.
Mr. Kroch's death Saturday in his suburban Chicago home could change the deal.
Although Mr. Kroch owned just one of the team's shares, he was a vociferous critic of Mrs.
Schott who joined the Reds partnership in 1981 because of his friendship with then general partner William J. Williams.
As she left Monday's meeting, Mrs. Schott said she was saddened by Mr. Kroch's death and recalled how she expected him at the meeting after talking to him just a couple of days ago.
Mr. Kroch, 84, would have been a big supporter of Mr. Williams' sons, Tom and Joe, who are contemplating being involved in a new group the limiteds could form if they match the offer.
The younger Williamses now have a piece of the St. Louis Cardinals in a group headed by William O. DeWitt Jr., a Cincinnati businessman who is awaiting a move by the limited partners to see whether he will try to run the team his father ran in the early 1960s.
But one of Mr. Kroch's two executors said Monday his death won't have an impact on the Reds' sale. Attorney Thomas Snyder, executor of the estate along with Northern Trust Co. of Chicago, said nothing has changed with the status of the share.
Mr. Kroch had no immediate family, leaving the share in the hands of his executors.
It's part of his estate. It's an asset like all his other assets, Mr. Snyder said. It could be sold. It could not be sold.
Legal sources close to Major League Baseball and the Reds said Mr. Kroch's death could actually move a sale along for either Mr. Dolan or the limiteds as one owner tries to gain majority of the 15 shares before the partnership expires Dec. 31, 2000.
Mr. Kroch had indicated he would keep his share in a new deal, but now, sources say, the share is most likely on the market. Mr. Snyder said it was too early to say what the estate plans to do with the share.
One partnership law expert said Monday Mr. Kroch's death triggers the right-of-first-refusal clause, which means the other limiteds get the right to match if the share is sold.
William J. Williams, the Kroch confidant who sold the club to Mrs. Schott in 1984, said Monday he thinks the limited partners will stick together and urged them to re-form into a corporation like the one that ran the team in the Big Red Machine days of the 1970s.
Mr. Williams pointed to a three-man committee that oversaw a club in which the owners appointed a team president, in this case, Bob Howsam.
I hear that they want (the team), Mr. Williams said of the limiteds. Of course, I don't know if it's really an offer. ... I think a corporation would be better than a limited partnership.
You get a solid guy to run it for you, and you have things like your annual meeting and you keep an eye on the budget, Mr. Williams said.
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