A trio of Diamondbacks minority owners have filed a lawsuit against the franchise’s managing general partner Ken Kendrick, according to a report from Zach Buchanan of The Athletic. The plaintiffs allege that Kendrick illegally forced them to either increase their stake in the Diamondbacks or have their shares bought out by the team. Kendrick argues that he and the team were within their rights to issue such an ultimatum.
The dispute stems from a letter in which Kendrick instructed minority owners with stakes of less than one percent to either increase their share to at least that threshold or to sell their shares back to the team at a price determined by a third-party appraiser. That decision was motivated by the Diamondbacks’ desire to “streamline its ownership group” and decrease the number of owners with minimal stakes in the franchise.
That initiative was backed by MLB, which “prefers” that teams maintain smaller ownership groups to facilitate more efficient governance. However, the suing owners argue that since the idea originated with the Diamondbacks and was brought to MLB for approval, the minority owners maintain their status as eligible holders.
For what it’s worth, Buchanan went on to say via Twitter that the lawsuit is in no way related to the team’s ballpark concerns, which have prompted rumors about relocation. Since the three stakeholders involved in the lawsuit all own less than one percent of the team, Buchanan says, “they have no governing power over it,” and therefore the franchise could relocate with them on board. Kendrick and team president and CEO Derrick Hall spoke in February about the team’s stadium situation, hinting at a persisting hope to construct a new ballpark (be it in Arizona or elsewhere). The team’s stadium lease with Maricopa County would allow the D-Backs to leave Chase Field as early as 2022.
It’ll be a story worth following as the suit progresses, and we’ll be sure to provide updates for you as they come.