2:39pm: ESPN's Buster Olney tweets that the Yankees would have signed Pavano only if they were able to work out a sign-and-trade that would have saved their first round draft pick. Pavano is a Type A free agent and would have required such compensation.
11:58am: Pavano seriously considered returning to the Yankees, according to Ken Rosenthal of FOX Sports. The Yankees explored a one-year, high-salary deal with Pavano before the Twins offered a second year.
10:43am: The Yankees paid Carl Pavano $39.95MM from 2005-08 and got 26 total appearances from the right-hander, who made annual trips to the 60-day DL. But Pavano's first stint in New York didn't stop the team from considering him this offseason. GM Brian Cashman told reporters, including Peter Botte of the New York Daily News, that the club had "several discussions" with agent Tom O'Connell, who represents the 35-year-old (Twitter link).
Pavano, who is 'very close' to a deal with the Twins, has rebounded from his four seasons in the Bronx. He has a 4.39 ERA with 5.7 K/9 and 1.6 BB/9 in 420 1/3 innings since the beginning of the 2009 campaign.