ST. PETERSBURG, Fla. — In a statement Friday, the Tampa Bay Rays called a lawsuit filed against owner Stuart Sternberg "baseless" and made up of false allegations.
"The allegation that a simple and commonplace corporate reorganization stripped the limited partners of the value of their investments and their rights and protections is patently false, and the limited partners know that," the statement read.
The lawsuit was filed in late June in a Pinellas-Pasco Circuit Court by a group of five that makes up about 9.6 percent of the team's ownership. It claims that Sternberg, without communicating to partners, fraudulently transferred the franchise to Rays Baseball Club at the start of 2020.
Under the partnership agreement, this group of minority owners claim to have the right to be informed of the partnership's tax and financial status. They also claim the right to be alerted to any amendments to the partnership agreement.
The partners suing Sternberg are Robert Kleinert, Markel Gary, the MacDougald Family Limited Partnership, Stephen M. Waters, and a trust in Waters' name.
Rays Baseball Club, which is controlled by Sternberg, now manages and operates the Rays franchise and team, the lawsuit claims.
"Sternberg reported that the huge investment return to the Partnership would result in additional taxable income of the partners but that he would not be making any distributions," the minority partners' lawsuit read.
The suit claims that Sternberg did not share that $376 million from Fox Sports Sun was received and had been transferred into Rays Baseball Club, meaning these funds would not become part of the partnership's revenues.
Sternberg is in violation of Florida's Deceptive and Unfair Trade Practices Act, according to the suit, which is seeking damages in excess of $30,000.
"These actions have stripped [the owners] of the value of their long-held investments in the franchise and team," the lawsuit read.
However, the statement from the Rays counters this, reading that the reorganization was approved by Major League Baseball, the team's lenders and others.
"It had no impact on any aspect of the limited partners' ownership interests or partnership rights," the statement read.
The statement also referred to three separate previously filed lawsuits based on the same claims.
These partners filed a lawsuit against Sternberg in May 2021 as well, claiming he was taking part in a "relentless scheme to squeeze" them out.
The Rays wrote that the court in the initial case determined that all except one of the claims should be decided by binding arbitration, which is an alternative dispute resolution that takes place outside of the judiciary courts.
"Rather than initiate an arbitration proceeding as required by the Court, the limited partners filed yet another lawsuit in a desperate attempt to avoid arbitration," the Rays statement read. "The plaintiffs prefer to publicly air their meritless allegations rather than seriously pursue their claims."
The "intentionally false claims" are meant to harm the Rays while they are engaged in efforts to build a new ballpark in Tampa Bay, the Rays' statement read.
"It is unfortunate that these plaintiffs have resorted to an improper litigation campaign that needlessly wastes the resources of the local court system," the statement read. "We intend to take all appropriate steps and seek all remedies and sanctions available to hold these limited partners accountable for their actions."
The partners responded to the Rays' statement Friday evening, accusing the Rays and Sternberg of "attempting a public character assassination" against the limited partners for "exercising their legal rights."
"Our clients stand by their claims and have certainly never made any allegations that they know to be false," the partners' response said.
They provided clarification on the multiple suits the Rays referenced.
"To be clear, the first suit is on behalf of the Partnership to remove 501SG as General Partner and the second suit is to obtain documents that have been withheld," the partners wrote. "The current suit is on behalf of the Limited Partners against Sternberg personally and Rays Baseball Club, based on recently discovered information that had been previously concealed from the Limited Partners."