Yet another multimillion-dollar legal battle emerged yesterday over last year's sale of the Washington Redskins, this one pitting the estate of Jack Kent Cooke against would-be franchise owner and New York real estate developer Howard Milstein.
The executors of the estate, who put the football team up for sale under terms of Cooke's will, filed a federal lawsuit to declare its right to keep a $30 million down payment made by Milstein during his ill-fated bid to become the new Redskins owner. They contend the payment is nonrefundable.
Milstein made the down payment in the form of a "letter of credit" that guaranteed the $30 million. The letter of credit expires next week, and the Cooke estate went to U.S. District Court in Alexandria yesterday to demand that Milstein honor it and pay up. Milstein's attorney countered by accusing the estate of trying to "mug" his client.
Bethesda businessman Daniel M. Snyder, a former partner in the Milstein bid, ultimately won the team. Snyder has since helped to lead the Redskins into the National Football League playoffs for the first time since 1993. The other players in the sale, however, have been locked in an increasingly nasty fight, generating attorneys' fees and a mountain of paperwork.
Milstein sued former Redskins president John Kent Cooke for $100 million, claiming the son of the late Redskins owner conspired with others in the NFL to derail his bid in hopes of keeping the franchise within the Cooke family. Milstein's attorneys also have explored suing the NFL or the estate. Lawyers for the estate, meanwhile, said they would have refunded Milstein's down payment, and covered his expenses, if he agreed not to sue anyone and drop the case against Cooke.
Snyder isn't part of any of the legal bickering.
Attorney Richard Cass released a statement on behalf of the estate that said: "We would have preferred to reach a resolution of this matter along the lines which Mr. Milstein himself suggested when he withdrew his bid last April -- a return of the Letter of Credit and reimbursement of his expenses in exchange for full mutual releases of all parties and dismissal of all claims, including the pending suit against John Cooke.
"We have tried to reach an agreement, but without success," the statement said, expressing hope the court will provide a prompt decision to settle the matter.
Milstein's attorney, David Boies, said Milstein believes the case against Cooke is based on solid legal grounds. Boies said he had hoped to continue negotiations with the estate and was taken aback by the suit.
"Having had the team stolen from him, they're now trying to mug him for another $30 million," Boies said, adding that even more litigation is likely. "The more people are suing, the more likely everybody gets dragged in."
Milstein initially sued Cooke and former Redskins general manager Charley Casserly in U.S. District Court in Washington. He later moved the case to D.C. Superior Court and removed Casserly as a defendant.
According to Boies, Milstein was attempting to narrow the legal issues and yesterday's action widened the battleground. Cooke's attorney, Joseph M. Hassett, declined to comment on yesterday's developments. Cooke was one of the executors of the estate.
Jack Kent Cooke, who died in April 1997, ordered in his will that a foundation be created and the proceeds from the sale of his estate be used to fund and distribute postgraduate scholarships.
The team was put up for sale in September 1998, and the auction ended in January 1999 with Milstein's $800 million bid emerging as the winner.
The deal called for Milstein to put up the line of credit, which was to be returned to him if his purchase was rejected by other NFL owners.
Milstein and the NFL could not come to agreement over financing and other issues, and he ultimately withdrew his bid last April after it became clear he would not win approval from the owners.
But by dropping out, Milstein gave up his right to the money, according to the Cooke estate and the Cooke Foundation.