The independent Northern League may be no more, but it lives on in a Cook County courtroom in the form of a lawsuit against the circuit’s former law firm.
The lawsuit, filed in Cook County Circuit Court, alleges that the league’s original law firm, Chicago-based Gozdecki, Del Giudice, Americus & Farkas, failed to adequately draft a franchise provision penalizing teams $1 million if they left the circuit. The lawsuit says the original intent was to cover all instances of a team leaving the Northern League, especially voluntarily, but in the end the provision only covered teams that were expelled. The provision, therefore, did not apply when four teams — Winnipeg Goldeyes, Fargo-Moorhead RedHawks, Gary-Southshore RailCats and Kansas City T-Bones — left the Northern League for the competing American Association. The result was a shaky four-team Northern League that ended up combining operations with two other indy league in the North American League.
“[Steven] Leech and the Gozdecki Firm were retained to draft a governing agreement for the Northern League that imposed a $1 million liquidated damages provision on any Member Team that sought to voluntarily withdraw from the League. This damages provision was critical to ensuring that the Northern League maintained a continuity of Member Teams to continue its operations, expand the League membership, and preserve and grow the value of the League and its teams.
“Unfortunately for the League, when four Member Teams gave notice that they were departing the League following the 2010 season to join a rival minor league association, it became clear that the liquidated damages provision in the agreement drafted by Leech applied only if a Member Team was expelled from the League by member vote. It did not encompass a Member’s voluntary withdrawal — its intended and sole purpose.
“Thus, the League was not compensated upon the mass exodus of fifty percent of the League’s membership. Unable to continue its operations – and without any means of offsetting the resulting financial losses — the Northern League went into a state of hiatus following the mass exodus.”
The league is seeking $4 million in damages.
Twenty years ago the Northern League formed in six Midwest cities, launching the independent-baseball industry and providing a template for multiple indy leagues across the continent. Twice the league was hit by defections; most of the teams playing in the Northern League over the years ended up in the independent American Association.
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