Marlins denied arbitration over claims it owes city and country money

Miami-Dade County’s attorney has denied the request of the Miami Marlins‘ current and former ownership groups to go to arbitration instead of fight in court over the county’s and city’s claims that they’re both owed proceeds from Jeffrey Loria’s $1.2 billion sale to financier Bruce Sherman and Yankees great Derek Jeter in October.

In the process, Miami-Dade County attorney Abigail Price-Williams, in a 20-page rebuttal, scolded the Sherman-Jeter group for claiming, “incredibly,” earlier this month that Miami-Dade County was not the proper venue because one of their owners had a company in the British Virgin Islands. That, they said, made them a corporate citizen of the BVI.

The county argued that the former ownership could have been granted arbitration over what amount was owed to the city and the county if it provided both with detailed financial reasons for a certain figure, something the county said the Loria group did not do. The county also said the Marlins’ new ownership group did not fully participate in an evidentiary hearing.

Now a judge will decide how it will be argued and if, as the team’s current ownership hopes, the venue needs to be changed.

A source with knowledge of Marlins ownership told ESPN that the setup in the British Virgin Islands was more to protect the team than to come up with some sort of fortuitous structure.

The investor is from South America, the source said, and the team wanted to make sure the investment wasn’t considered a South American investment due to the government seizing assets from businesses. The BVI corporation offered an additional level of protection, the source said.

For example, the address of the corporate office of the business, Abernue Ltd., is a post office box in the British Virgin Islands. That much was discovered last week by Miami sports radio personality Andy Slater, who visited the location and confirmed with the post office that the company received its mail there. A further investigation by ESPN uncovered that the corporation did not exist before the Marlins’ sale.

ESPN obtained the registration of the company, Abernue Ltd., from BVI’s registry of corporate affairs. Abernue Ltd. was incorporated on July 7, 2017 — 35 days before then Marlins president David Samson confirmed that owner Jeffrey Loria would sell the team.

Abernue Ltd. is not tied to any individual in the filings, and ownership of a company registered in the British Virgin Islands can be revealed only through a court order.

Instead, it’s registered agent is the MMG Trust, an organization put together by a law firm named Morgan & Morgan, which has offices in the BVI.

On its website, Morgan & Morgan points out what has made the British Virgin Islands so popular: Corporations can be registered, aren’t subject to any type of taxes, including capital gains taxes, and the individuals have no responsibility to update the country on any of the organization’s activities.

The phone number listed on the firm’s website for Luis Manzanares, the managing partner of the trust, was not in service. An associate of Manzanares, attorney Yosela Escudero, returned an email addressed to Manzanares saying that Morgan & Morgan could not reveal any details about Abernue because “we are bound by attorney privilege, which has not been waived by client.”

Bill Maurer, professor of anthropology and law at UC Irvine, said the three reasons to set up a corporation in the BVI are to further mask the ownership of an organization, protect or hide assets, or do what the Marlins wound up doing, using the setup to get a more favorable jurisdiction for any legal proceedings.

That’s one of the reasons why, Maurer said, companies incorporate in Delaware, so they can push legal proceedings to the state’s Court of Chancery, which acts more like an arbitration instead of a standard trial. The main Marlins investment from the new owners is incorporated in Delaware, not Florida. It’s a common tactic, as more than 60 percent of Fortune 500 companies have their corporation set up in that state.

“Major League Baseball vetted and authorized all the members of our ownership group,” Marlins spokesman Jason Latimer said. “We are proud of the international makeup of our ownership group, reflective of the diversity of Miami and South Florida. The name on our jersey says Miami and this ownership group remains committed to the community.”

It is not known what type of money, if any, was cycled by the investor through this vehicle, but Maurer said the BVI is typically set up for corporations and trusts, not as a venue where much offshore money is actually stored.

Despite the fact the grouping of 60 Caribbean islands that make up the BVI has only 25,000 inhabitants, more companies are incorporated there than any other place in the world.

There are days that change the course of your life forever. If you ask my mom and dad, they might say the birth of their children, the death of their parents or the assassination of President John F. Kennedy.

For me, it’s Sept. 20, 2017, when Hurricane Maria made landfall on my native island of Puerto Rico.

I had a trial run decades earlier, on Sept. 18, 1989, with Hurricane Hugo. As a kid, I thought it was exciting, and the good kind of scary, to follow the hurricane’s path and wonder what a direct hit from a Category 5 storm would be like. I became a bona fide 13-year-old expert on the Saffir-Simpson scale.

And Hugo was devastating, with winds in the 100-mph range hitting the northeast coast of the island, where my family lived. But it was classified as a Category 3 storm when it arrived, so in my warped teenage brain, I was disappointed.

The few weeks we were without power were fun. There was no school, we played board games and I got to stay up late (with my very own flashlight!) and listen to the radio. There were no cell phones back then, so the big treat was to watch a black-and-white, 6-inch, battery-powered TV for an hour.

Flash forward to 2017. I was in Seattle covering the Mariners and Houston Astros, and Hurricane Irma was the main topic of discussion among the large concentration of Puerto Rican coaches and players at Safeco Field that Sept. 6, including Alex Cora, Carlos Beltran, Carlos Correa, Alex Cintron, Edgar Martínez, Edwin Diaz, Emilio Paganand even George Springer, whose mom’s family is from the small town of Utuado.

Irma ended up skirting the island. I was able to check on most of my family and friends. My brother Rey’s house was slightly damaged and they lost power, but Irma did not have the level of devastation we had all feared.

Two weeks would make all the difference. On Sept. 16, Hurricane Maria formed out of just a “tropical wave,” but two days later it had turned into the deadliest storm of the hyperactive 2017 Atlantic hurricane season.

Maria hit Puerto Rico on Sept. 20. It slammed ashore in the southeastern town of Yabucoa at 6:15 a.m. local time. The Cleveland Indians were scheduled to play the second of a three-game set against the Los Angeles Angels on ESPN’s Wednesday Night Baseball. At 3:15 a.m. PT in Anaheim, I was glued to the Weather Channel.

Maria became the first Category 4 storm to make landfall in Puerto Rico since 1932. And the 13-year-old inside of me knew exactly what that meant.

Power and communication were completely cut off to the vast majority of the island, which led so many Puerto Ricans — including our hodgepodge group of Francisco Lindor, Roberto Perez, Sandy Alomar Jr., Martin Maldonado and Cleveland’s assistant strength and conditioning coach Nelson Perez — scrambling to check on each other’s families.

None of us knew if our relatives were still alive. It wasn’t until a week later that I got a message from my mom. Her town was devastated, but she was OK. My mom, being my mom, comforted me as I wept.

I still had not heard from my dad and stepmom. I texted and called everyone I could think of, to no avail. All I could do was immerse myself in my work. But with the playoffs about to start, I didn’t have half a mind to focus on baseball.

Then, on the morning of Oct. 4, my phone rang. The caller ID read “Papi” — a term of endearment used in Spanish to refer to your father.

My mom and dad have this uncanny ability to always call at the worst times — as I’m boarding a plane, or in the middle of an interview, or during the bottom of the ninth inning with the bases loaded and two outs. Not this time. I leaped from the bed and stood by the window of my Arizona airport hotel, where I had just checked in. I struggled to hear my dad’s broken words.

All I wanted was to hear my dad’s voice, but I kept hearing static on our broken connection and could barely make out the word “Yankees.” I was confused.

Finally, I figured out what he was saying: “¿Qué pasó con los Yankees?”

My father, who with former Astro Jose Cruz, is the source of my love of “béisbol,” was asking me, “What happened with the Yankees?”

Since he had no power or communication, my dad had no idea the New York Yankees had beaten the Minnesota Twins in the American League wild-card game, advancing to the division series against Cleveland.

I muted the phone and laughed for the first time in a long while, and cried at the same time. Then I told my baseball-obsessed papi that the Yankees had moved on and that I was in Arizona for the National League wild-card game.

And then the phone cut off.

I couldn’t speak to my family regularly for weeks. Many were without power for five or six months. Countless houses and businesses were destroyed, including so many belonging to my family and friends.

During the playoffs, every time anyone from Puerto Rico was around, Maria was the only topic discussed. And though those weeks are now mostly a blur, I clearly remember Cintron hugging me, in tears, as the Astros celebrated beating the Boston Red Sox in the ALDS, without him having heard a word from his mom.

I remember Chicago Cubs rookie catcher Victor Caratini asking me to check if my father had heard from his father. My father and Victor Caratini Sr. have known each other most of their lives, having grown up in the small town of Coamo in the center of the island.

And more than anything, I remember a crying Carlos Beltran, powerless to send aid to the island.

I flew home for the first time after Maria with Beltran and his wife, Jessica, in mid-November, one of the many trips organized by active and retired Puerto Rican athletes to help in the recovery.

To see the island in such a condition, with no power and without a single working traffic light, was heartbreaking. I wondered how, in barely six months, Puerto Rico would manage to host its first regular-season MLB games since 2010, in a 56-year-old stadium that was extensively damaged.

Yet on April 18, 2018, ESPN broadcast the Minnesota Twins and Indians at Hiram Bithorn Stadium in San Juan. In the middle of unbearable sadness and devastation, and the many lives we might never know were lost, Puerto Rico turned tragedy into triumph.

A year after the storm hit, the rebuilding process is ongoing. And while our lives have been forever changed, the strength of the Puerto Rican people, including the 19 Puerto Rican players in the major leagues this season, has never been more evident.