Daniel Snyder scores a preliminary win in legal fight with his limited partners

Mike Florio
·2 min read

In the ongoing legal battles between Washington majority owner Daniel Snyder and his limited partners, Snyder has scored a preliminary win.

A federal judge in Maryland has ordered two key questions relating to the potential sale of the minority interest in the franchise to be resolved by arbitration. In a 12-page ruling issued earlier today, the Honorable Peter J. Messitte concluded that private arbitration must determine whether the limited partners “have submitted a sufficiently complete good-faith buyout proposal” to Snyder, and whether Snyder has properly engaged his right of first refusal in connection with the three limited partners who want to sell their shares in bulk.

Dwight Schar, Robert Rothman, and Fred Smith collectively own 40.499 percent of the team. They want to sell their full interest to the same group of buyers. Snyder, however, allegedly wants to exercise his right of first refusal as to the percentages held by Rothman and Smith, but not as to Schar.

The limited partners filed suit in federal court in an effort to force Snyder to buy all of the interest or none of it. Snyder and the NFL argued that an arbitrator must resolve these issues. Generally speaking, the arbitration procedures outlined in the ownership documents and the NFL’s Constitution & Bylaws provide a more favorable forum for the league’s interest than does a fully independent court of law.

Although the federal court agreed with Snyder and the NFL, Judge Messitte has retained jurisdiction over the case, if needed to protect the limited partners’ ability to search for and negotiate with current or future prospective bidders without interference by Snyder, the NFL, or the arbitrator assigned to handle the dispute.

Ultimately, a high-stakes games of chess, checkers, and chicken could unfold, with a potential ownership group striking a deal to buy the full 40.499 percent but with Snyder then potentially able to cherry pick the percentage(s) he wants to retain. Snyder’s potential ability to buy some but not all of the minority interest could, as a practical matter, scare away potential buyers.

The ruling does not operate as a cancellation of a hearing set for January 7 on the question of whether and to what extent Snyder and the minority owners will be grilled by the judge regarding potential breaches of a court order mandating confidentiality and non-disparagement. So, basically, there will be plenty more fireworks before this one is finally resolved.

Ideally, someone should play the role of Moe Howard and clunk everyone’s heads together, with a directive to work out their problems. It unfortunately seems that this specific ship has sailed, months ago.

Daniel Snyder scores a preliminary win in legal fight with his limited partners originally appeared on Pro Football Talk