NBA Wants to be a Party, woohoo!
Posted on Wednesday, July 9th, 2008 at 11:42 am by Mr. Baker (thinking good thoughts for George Karl))
Not that kind of party; a party to the lawsuit between Howard Schultz and Bennett (PBC).
The NBA has asked to intervene in a Seattle federal lawsuit to help prevent coffee mogul Howard Schultz’s former Seattle SuperSonics’ ownership group from voiding the sale of the team to its current Oklahoma owners.
If the judge does undo the sale, the NBA says it has a legal interest in making sure any new owner is “qualified in all respects to operate an NBA team and has the ability to provide for the long-term financial stability and efficient operation of the Sonics.”
The Schultz group’s requests to void the sale “are fundamentally inconsistent with the most basic rules and regulations governing the operations of the NBA and its member teams, which do not authorize or permit ownership transfers without the express approval of the NBA,” the league said in its request for intervention.
The NBA contends the Schultz group is barred from trying to void the sale by a release and indemnification agreement the group signed in exchange for the NBA’s approval of the group’s sale of the team to a group of Oklahoma owners headed by Clay Bennett.
Because of the release, “former owners are prevented from taking future legal action that could disrupt the efficient management and operation of the league and each of its member teams,” the NBA told a federal judge.
The Schultz group sold the team to Bennett’s group for $350 million in July 2006. This year, the Schultz group filed a federal lawsuit in an attempt to void the sale, contending Bennett’s group fraudulently represented that it wanted to keep the team in Seattle when its real desire was to move the franchise to Oklahoma City.
The team is currently in the process of moving to Oklahoma City after settling another federal lawsuit filed by the city of Seattle. That settlement allowed the team’s Oklahoma owners to buy their way out of the remaining two years of a Seattle arena lease.
“The financial success or failure of the business of the NBA is vitally affected and substantially determined by the success or failure of each individual team,” the NBA said in its intervention request. “The NBA Constitution, which binds all NBA owners and member teams, makes clear that the NBA Commissioner and NBA Board of Governors have the sole and exclusive authority to approve or disapprove any proposed transfer of an ownership interest in an NBA team.
In its lawsuit, the Schultz group is asking a federal judge to cancel the sale and appoint a receiver to operate and manage the team until the team can be transferred to “an honest buyer who desires to keep the team in Seattle.”
In the NBA’s intervention request, it said that the league’s constitution contains a provision that if a receiver is appointed for any team, the NBA’s board of governors has the right to cause the team “to be placed under the management and control of the commissioner.”
“The purpose of these provisions is, of course, to ensure that NBA teams are, at all times, operated only by persons that have been found by the NBA board of governors to be fully qualified to manage and direct a professional basketball team in accordance with NBA rules and regulations,” the league said. “Enforcing and safeguarding the provisions of its own Constitution are plainly protectable interests and entitle the NBA to intervene.”
“news” OK, reporting.
July 9th, 2008 at 11:46 am
Here’s the filing:
http://downloads.newsok.com/documents/nbaintervene2.pdf
July 9th, 2008 at 11:46 am
Do Work SCHULTZ!!!!!!
July 9th, 2008 at 11:47 am
“Because of the release, “former owners are prevented from taking future legal action that could disrupt the efficient management and operation of the league and each of its member teams,” the NBA told a federal judge.”
So is this going to put an end to the Shultz case?
July 9th, 2008 at 11:48 am
Seems to me Ballmer is fully capable and qualified…
July 9th, 2008 at 11:49 am
Go for it Schultz why not huh still hope.
July 9th, 2008 at 11:50 am
The NBA contends the Schultz group is barred from trying to void the sale by a release and indemnification agreement the group signed in exchange for the NBA’s approval of the group’s sale of the team to a group of Oklahoma owners headed by Clay Bennett.
The release and Approval is part of the sale process, if you void the sale then you void the signed documents that you were convinced to sign via fraud, including the release documents. A document contingent on a fraud is not a logical argument I would want to make in court, good luck with that one commish.
July 9th, 2008 at 11:51 am
Here’s the section in the Purchase Agreement that the filing appears to reference:
3.8 No Other Representations and Warranties
Except for the representations and warranties contained in this Article III, Buyer makes no other representations or warranties, written or oral, statutory, express or implied. Seller acknowledges that except as expressly provided in this agreement, Buyer has not made, and Buyer hereby expressly disclaims and negates, and Seller hereby expressly waives, any representation or warranty, express or implied, at common law, by statute, or otherwise relating to, and Seller hereby expressly waives and relinquishes any and all rights, claims and causes of action against Buyer and its representatives in connection with the accuracy, completeness or materiality of, any information, data or other materials (written or oral) heretofore or simultaneously outside of this agreement furnished to Seller and its representatives by or on behalf of Buyer.
July 9th, 2008 at 11:52 am
Yes, they are qualified (thanks for the memo NBA), they are kind of keeping a frame around what could result, it does appear that the only likely owner of the Sonics, should Howard win, is Ballmer.
July 9th, 2008 at 11:53 am
If this goes through and the NBA prevents Schultz from doing anything then I think it’s fine time for federal courts to take a look at the NBA and the monopoly they have over cities right now.
July 9th, 2008 at 11:57 am
A document contingent on a fraud is not a logical argument I would want to make in court, good luck with that one commish.
Maybe so, but it does protect them from the Breach of Contract part of the suit.
July 9th, 2008 at 11:57 am
If Schultz’s suit undoes the sale it undoes what the NBA agreed to sanction. Can the NBA demonstrate that, had Schultz not sold the team, they would have exercised “the right to cause the team ‘to be placed under the management and control of the commissioner’”? Please. And if local buyers are ready to buy the team out of trust after it’s returned to Seattle, what legitimate complaint could the board of governors have?
“The purpose of these provisions is, of course, to ensure that NBA teams are, at all times, operated only by persons that have been found by the NBA board of governors to be fully qualified to manage and direct a professional basketball team in accordance with NBA rules and regulations.”
And if Bennett had been implicated in fraud, let alone proven guilty of it, prior to the sale, how then would the NBA board of governors have judged his fitness to manage and direct a professional basketball team?
Give me a break. The NBA wants its players to show respect for the law; perhaps the NBA itself should lead by example.
Join the party, NBA, please. Maybe you’d like to be a party to fraud, as well. You better hope you weren’t or that Schultz can’t prove it.
July 9th, 2008 at 11:58 am
Dick, they can not ask for more after the sale that is outside of the agreement as written, but the agreement was based on intended fraud, not something verbal left out of the sale. GFBE document was included in the Approval, NBA got a copy. The “outside agreement” was included in the sale Approval.
That might be a mistake on the NBA’s part, or they are tying to have some control of the outcome without getting a judgement against them. I’m guess it is the second one.
July 9th, 2008 at 12:00 pm
“except as expressly provided in this agreement”
Can’t remember, did the GFBE portion/side letter have any remedy stuff listed?
July 9th, 2008 at 12:02 pm
GFBE document was included in the Approval, NBA got a copy. The “outside agreement” was included in the sale Approval
********
That’s how I feel.
Plus, Stern has been quoted as being aware of the GFBE after the sale. Why would he care then but not now? Oh yeah, he’s trying to lie his way through everything too.
July 9th, 2008 at 12:04 pm
I find this encouraging.
July 9th, 2008 at 12:09 pm
Schultz has got under their skin. No cause to intervene if this really is the frivolous lawsuit that Bennett/Keller claimed. Herr Commissioner certainly has found some reason for concern. Yeah, like having a judge tell him who can own a team. Even the remotest chance of that makes the NBA squirm at least a little. Yarmuth has got to be smiling today…
Another sign that there is some leverage on the Seattle side. Don’t want to be very optimistic, but anything that makes Stern meet with his attorneys makes me feel a bit better…
July 9th, 2008 at 12:12 pm
GFBE will not factor in court since that was part of the contract and the contract can’t be challenged due to section 3.8.
The only part that the judge can decide is the issue of fraud.
July 9th, 2008 at 12:15 pm
If fraud is found then the contract Schultz was induced by fraud to sign is null and void, section 3.8 included.
July 9th, 2008 at 12:17 pm
Right Moffet, it’s fraud or bust.
July 9th, 2008 at 12:32 pm
wow, this could get messy.
Schultz, if you’re reading this (which you’re not) please drag the NBA through as much mud as possible while you can. The city bailed on us in that regard, well you have already bailed on us once, the city that made you a billionaire, please give us this.
July 9th, 2008 at 12:32 pm
“Right Moffet, it’s fraud or bust.”
Sorry, I misunderstood where you were coming from.
The distinction between fraud and breach of contract here is interesting. Is it a distinction with a difference? Don’t they occupy the same ground?
How does that work in contract law? How can you have a provision in a contract that tells one party that they are violating the contract if they pursue the other party for violating the contract? That doesn’t sound very equitable.
July 9th, 2008 at 12:40 pm
10 bucks says the Sonics players have already done any and all things worth doing in OKC entertainment and fun wise.
July 9th, 2008 at 12:55 pm
I have a question for Dick Tate: I never thought that a finding of breach would lead to a return of the real Sonics to Seattle. A more appropriate remedy for breach would be financial. On the other hand, a finding of fraudulent inducement would void the contract and return the team? Is this what you mean when you said it’s fraud or bust?
The NBA seeking to join gives Schultz another chance to amend his complaint. I would be happy if Schultz sued for damages instead of just returning the team. If he wins cash, at least he would be sticking it to the evil barons from OKC. I would be even happier if Schultz donated the money to whoever brings a team to Seattle (or donate the money to the stadium project). That way, Schultz would not be in it for personal profit and the money would undo some of the damage he has done.
Establishing breach is much easier. A cash remedy is much more likely.
Schultz made very bad mistakes in the past, but he can become a true hero. Go Howard !!!
July 9th, 2008 at 12:56 pm
Well, I guess we have to at least use this to cling on to some hope. I’m sorry guys, I have been very inactive on the boards lately. Just trying to come to terms with the fact that this team for now is gone. It is going to make me sick if I see Westbrook, Durant, and Green develop in OKC.
Sounds far fetched by the NBA. If there is one thing I have noticed, (and of course others know this as well) the contrast in reaction shows somewhat the NBA’s concern in the matter, but they do realize that by making themselves a party to this deal it hightens the opportunity for deposing Mr. Stern, and certainly other NBA execs.
Are they forgetting that by making that kind of stuff public knowledge they are allowing people like Sen. Specter into the leagues business somewhat. I don’t know whether or not viability of Key Arena or arena issues for that matter will really come up…but still it’s a lot easier to find a legal reason to get Stern on the stand in other matters when that seal has already been broken via-the Schultz trial. I don’t know maybe I am not making any sense. Let’s just see where this thing goes, definitely taking some turns, I am a little bit surprised that the NBA is stepping in. They are putting something on the line here.
July 9th, 2008 at 1:08 pm
I have a question for Dick Tate: I never thought that a finding of breach would lead to a return of the real Sonics to Seattle. A more appropriate remedy for breach would be financial. On the other hand, a finding of fraudulent inducement would void the contract and return the team? Is this what you mean when you said it’s fraud or bust?
I feel the team can try to argue for fraud (although I don’t give them much chance for success) to void the contract, but they can’t argue for breach due to the provision in the contract.
July 9th, 2008 at 1:09 pm
Replace “the team” with “Schultz”.
July 9th, 2008 at 1:19 pm
“I feel the team can try to argue for fraud (although I don’t give them much chance for success) to void the contract, but they can’t argue for breach due to the provision in the contract.”
And yet they’d be arguing for breach due to a provision in the contract.
I’m willing to bet that’s pretty standard language and not enforceable as you’re interpreting it. Contract law, the law in general, concerns itself with equitability (ostensibly). Isn’t holding Schultz to a provision that doesn’t allow him to hold Bennett to a provision a clear double-standard? When you sign that form freeing your doctor of liability in the event of some accident or another, that does not me you still have no legal recourse against gross negligence. If you are made to sign a contract under duress that has a provision that says you can’t pursue any legal action if you signed the contract under duress, does that provision have any legs? As you’re reading it, that’s a getting-it-both-ways clause. I’m dubious.
July 9th, 2008 at 1:20 pm
God Bless the NBA.
The certainly don’t want some silly little lawsuit to interfere with the “stability” of a franchise that was obtained through fraud, gutted, its fan base alienated and then relocated from a major market to a cowtown.
Is there any limit to their arrogance?
July 9th, 2008 at 1:20 pm
10 bucks says the Sonics players have already done any and all things worth doing in OKC entertainment and fun wise.
I’ll take that bet! There is no way they have had the time to dodge softball sized hail, chase tornadoes, out run prairie fires, harrass fire ants, rope cattle, use meth, laugh at thier riverwalk rip off, inhale a dust storm, okra bobbing, satan worshiping, prairie dog shooting, tractor racing, and trailer park trolling.
July 9th, 2008 at 1:26 pm
“I’ll take that bet! There is no way they have had the time to dodge softball sized hail, chase tornadoes, out run prairie fires, harrass fire ants, rope cattle, use meth, laugh at thier riverwalk rip off, inhale a dust storm, okra bobbing, satan worshiping, prairie dog shooting, tractor racing, and trailer park trolling.”
You forgot gay-bashing and homoerotic e-mailing.
July 9th, 2008 at 1:28 pm
I’ll take that bet! There is no way they have had the time to dodge softball sized hail, chase tornadoes, out run prairie fires, harrass fire ants, rope cattle, use meth, laugh at thier riverwalk rip off, inhale a dust storm, okra bobbing, satan worshiping, prairie dog shooting, tractor racing, and trailer park trolling.
Really? Everyone knows the satan worshippers live in Colorado. Unless you’re talking about Satan Bennet or David Satan. Then I agree that’s way too much stuff to experience in this amount of time.
July 9th, 2008 at 1:58 pm
Convenient how this came out after the City/Sonics settlement. Because the NBA was a party to that settlement, they signed off on it, and thereby acknowledged the legitimacy of Schultz’s case, in my opinion. (Considering the settlement had provisions in case Schultz won).
July 9th, 2008 at 2:05 pm
Convenient how this came out after the City/Sonics settlement. Because the NBA was a party to that settlement, they signed off on it, and thereby acknowledged the legitimacy of Schultz’s case, in my opinion. (Considering the settlement had provisions in case Schultz won).
July 9th, 2008 at 2:07 pm
F-ing NBA . . .as if I needed another reason to hate the powers that be that run this league. The idea that essentially they are joining a suit to ultimately protect/condone fraudulent behavior is hard to believe.
Stern has been such a steadfast supporter of Bennett and this uprooting throughout — really starting to have a visceral hate of the guy.
Maoling has it right above — is there no limit to their arrogance?
July 9th, 2008 at 2:18 pm
I am not that optimistic. For me, I believe the Sonics are gone, and Schultz won’t be able to return it to Seattle. I hate to admit, but I think that NBA is done in Seattle. Let’s get an NHL team instead. Trust me, any NBA team, if we get one, would be pseudo-Sonics in our mind, it won’t be the same. I don’t see anyone winning a case against an NBA, especially while Stern is a comish.
Very sad.
At the same time we should blame our politics for the situation we got into. They saw this coming, and decided to bluff, and then they just bent over. Sorry, still fuming about Sonics departure.
July 9th, 2008 at 2:20 pm
I bet Nickels is seething about the Schultz suit… he can’t spend the $45M since it might have to be returned and he can’t fill the dates at the Key since the lease might be reinstated. Pity the bastard.
July 9th, 2008 at 2:24 pm
What’s amazing is that the NBA is essentially telling the court that it really has no jurisdiction over what the league does. Judge Pechman will be delighted to hear that.
There aren’t many people in this world that would cause me to celebrate if they fell off a cliff. But I’d do cartwheels if Stern and Bennett disappeared from the face of the earth.
July 9th, 2008 at 2:28 pm
“Maybe so, but it does protect them from the Breach of Contract part of the suit. ”
Protects the NBA, not Bennett. If Bennett loses, and a judge says that you can not have the team back, but 100 million dollars, that would come from Bennett and NOT the NBA.
They are isolating the owner from the league as a whole.
July 9th, 2008 at 3:08 pm
Eric E says:
“10 bucks says the Sonics players have already done any and all things worth doing in OKC entertainment and fun wise. ”
It’s comments like these, and the over-confidence behind them that caused Seattle to lose their NBA franchise to start with.
If the citizens of Seattle had recognized OKC as a legitimate threat from the start, something more might have been done to save the team.
Underestimate your foe at your own peril.
July 9th, 2008 at 3:21 pm
So, Shultz et. al. signed a contract that be cannot enforce in court because of the above stated paragraph. I have a hard time believing that that is the proper reading.
July 9th, 2008 at 3:24 pm
Ok - I agree with Mr Baker’s reading. The NBA is protected, not the PBC. And the NBA is now arguing that that protection includes any harm to the NBA as a league that would result from rescinding the sale. Seems like a stretch as a legal theory.
July 9th, 2008 at 3:26 pm
so the NBA is saying it condones fraud?
July 9th, 2008 at 3:47 pm
Ok - I agree with Mr Baker’s reading. The NBA is protected, not the PBC.
The release signed with the NBA is what protects the NBA. The purchase agreement section 3.8 is what protects the PBC from a breach suit.
July 9th, 2008 at 3:48 pm
Interesting tidbit. . . One of David Stern’s lead attorneys on this case, Richard Buchanan, is a 1981 Bainbridge High School graduate. Rick grew up a die hard Sonics fan just like the rest of us.
Gee thanks!
July 9th, 2008 at 4:12 pm
The league is saying it is not a party to the fraud, and retains the right to approve who is granted ownership if Howard wins. Stanton is part of the old Schultz group, is part of the Ballmer group, and the NBA already identified the Ballmer group as a potential owner.
The release is (in my view) NBA talk for an owner not being able to sue the league when buying or selling, they are kind of claiming to be like your escrow when facilitating the transaction; and yet they also get to set the terms, approve the buyers and sellers, and a host of other things that Schultz and Bennett and everybody else willingly sign away as rights in order to get a team.
They don’t want an Al Davis situation, though they cond of have it de facto, by rubber stamping moves. They can have control by approving who can by, and the type of building, and insist on a level of revenue.
Signing the document through fraud pops that thing open between Bennett and Schultz.
This will test private business rules within legal rules.
July 9th, 2008 at 4:18 pm
The post at the bottom is an interesting read
http://blogs.king5.com/archives/2008/07/nba-intervenes.html
July 9th, 2008 at 4:21 pm
TB Says:
July 9th, 2008 at 3:26 pm e
“so the NBA is saying it condones fraud? ”
No, I think they are saying they are not a party to a fraud, they had acted to ensure they know who they were having buy and sell to, and the retain control of who gets to buy and sell. If this is undone, then Schultz can only sell to somebody the league approves.
The NBA, and Stern can use that Bennett email, Greatest exec on earth, hug-hug, Abrey was bad, email to show they were not a party to the Bennett activity.
In the end I do not see the team coming back, though it would not be the first time a team relocated to OKC and then returned home, the Hornets have been there and done that.
I am not sure any of this matters, don’t care if it just means Bennett pays Schultz some money, because if he won it would at least be one more pile of dung thrown on Clay Bennett, I’m OK with that.
July 9th, 2008 at 4:53 pm
I agree with maoling, I wonder how the judge views Sterns oppinion of “its my league and I make the rules” statement. It seems they are claiming that only the NBA can dictate who gets to be an owner, and no federal judge can take away what is theirs. This is awsome! And to quote the infamous douche bag, “the game is just getting started!”
July 9th, 2008 at 5:06 pm
I know, you would think the NBA has more power than our own federal government. The NBA is beyond the rules, they have their own constitution for god’s sake. What a joke!
July 9th, 2008 at 5:23 pm
So is the NBA kind of like a cult???Koresh, the Polygamist Sect in Texas etc…All have their own rules which circumvent the laws of the land????????
July 9th, 2008 at 5:24 pm
Come to think of it…The league office is like a little Colorado City, AZ…Google it..
July 9th, 2008 at 5:27 pm
3.8 makes the exception for the buyer only to Article III, the seller provision includes the entire contract. I think the GFBE is absolutely fair game. Read the 1st two sentences.
Except for the representations and warranties contained in this Article III, Buyer makes no other representations or warranties, written or oral, statutory, express or implied. Seller acknowledges that except as expressly provided in this agreement
July 9th, 2008 at 6:03 pm
[i]Buyer makes no other representations or warranties, written or oral, statutory, express or implied.[/i]
Those statements when the PBC assured the BCOS that their intentions were to keep the team in Seattle is where the “fraudulent representation” part of the complaint comes in.
July 9th, 2008 at 6:06 pm
“I’ll take that bet! There is no way they have had the time to dodge softball sized hail, chase tornadoes, out run prairie fires, harrass fire ants, rope cattle, use meth, laugh at thier riverwalk rip off, inhale a dust storm, okra bobbing, satan worshiping, prairie dog shooting, tractor racing, and trailer park trolling.”
Let’s not forget noodling in the muck and the mud for oversized catfish.
July 9th, 2008 at 6:35 pm
NBA’s exhibit D (Release and Indemnification): http://seattletimes.nwsource.com/ABPub/2008/07/09/2008042469.pdf
In case anyone was interested in who the members of BCOS were, all of their signatures are in this doc.
July 9th, 2008 at 6:47 pm
Dear Judge Pechman,
If Mr. Bennett is ruled to have committed fraud, breached his contract and the sale is rescinded, the court will need NBA approval before any change in ownership can take place.
Additionally, Mr. Stern will administrate over the team until a full review of your decision is conducted by the league. We hope this clarifies the court’s role in this matter.
Sincerely,
The NBA
Where Collusion Happens
July 9th, 2008 at 7:08 pm
Dick Tate… You are just the greatest.. You feed my hunger for INPUT.. NEED INPUT…
This one is dedicated to Howard Schultz
http://www.youtube.com/watch?v=-Kiq_-MUTOE&feature=related
July 9th, 2008 at 9:14 pm
If I am Judge Pechman, this move pisses me off. I would be thinking: “Don’t come into my house and tell me how to run things! I am a federal judge, you are in my courtroom, I will tell you how things are going to go down!” And, to send a message, I deny this motion and may have a chip on my shoulder as to how I ultimately decide things from hear on out - i.e. in Shultz’s favor. At least, that is how it plays out in my dream world…
July 9th, 2008 at 9:54 pm
What the league is attempting to do is to claim the suit can not be valid because the remedy they are seeking is not consistent with NBA rules that the parties agreed to (after the fraud). The NBA would have to agree that one of its team can not be put in trust, that action is not for Bennett, Schultz, or the court to say, they are not agreeing to the remedy.
They are questioning the remedy without acknowledging the cause and the case that would result in the remedy.
I do not see where Howard is saying that he has exclusive right to decide, but as the owner he has the right to sell or not sell an NBA team. He can set his own criteria, if the NBA can not agree and locate an buyer, or refuses to find a buyer, that might be a problem for other owners that want to sell in the future.
I think it is fair for them to dispute the remedy, question if that is reasonable for Bennett to have the right to specifically perform that act should he be found guilty. I do not think they can stop the inquiry, the case, or the judgement, the can appeal a ruling, or the judge can hear why Ballmer getting a team through Schultz is not ok, when it would be as referenced in the league statement of the settlement with the city.
It could be argued, that the judge doesn’t have the right to place the team in trust.
It can be argued that somebody other than the league has the authority to authorize ownership.
It can also be argued that there was fraud and the team should go back to Howard and he has the right as an owner to sell it, or not sell it, to the group he finds acceptable. The league would have a hard time arguing that Howard has not been an approved owner by the NBA, he can submit his Ackerly sales agreement with the league signatures on it.
Matt Griffin said, it isn’t very important that they own the team, that just looked like the only way to get a team into Key Arena. Howard could own it until the league agreed to allow Howard to sell it to Ballmer.
The NBA wants to say this is impossible as a remedy, that doesn’t mean the fraud didn’t happen, and the judge may agree, finding the remedy not possible, but the cash equivalent $350 million.
July 9th, 2008 at 9:57 pm
“The NBA would have to agree that one of its team can not be put in trust, ”
should be
“The NBA would have to agree that one of its team can be put in trust, “
July 9th, 2008 at 10:15 pm
How can anyone trust any contract if there is no remedy if you later find fraud? I’m sorry but even the idea of this whole thing makes my head ache.
July 9th, 2008 at 10:20 pm
It can also be argued that there was fraud and the team should go back to Howard and he has the right as an owner to sell it, or not sell it, to the group he finds acceptable.
It would be quite difficult to argue that Schultz has that right since he isn’t willing to return the $350M purchase price.
July 9th, 2008 at 10:27 pm
Matt Griffin said, it isn’t very important that they own the team, that just looked like the only way to get a team into Key Arena.
Tom Carr said otherwise on KJR yesterday. Per the terms of the deal, if Griffin’s group doesn’t own the team then whomever else owns the team would be on the hook for the $150M.
July 9th, 2008 at 10:40 pm
I know it has been popliarized the he is refusing to return the money, but I do no read it that way, I think the benef Schultz wants to deny him is the 70 million dollar price break he got by agreeing to GFBE, otherwise Hiward could have sold for more to somebody intending to move the team, and not lie about it to get a price break.
July 9th, 2008 at 10:45 pm
If the PBC believes that Schultz is barred from bringing a breach of contract suit, expect them to shortly file a motion to dismiss that claim.
Moffett asked, “How can you have a provision in a contract that tells one party that they are violating the contract if they pursue the other party for violating the contract?” If that provision was inserted into the contract to shield the PBC from fraud, it is toilet paper (it won’t hold up). Schultz will argue that the PBC inserted this provision into the contract in order to shield itself from a lawsuit for breach of the GFBE, because the PBC fraudulently intended to disregard the provision. While the failure to make a good faith effort is not proof of intent to defraud, it is a factor to consider.
The court will read the contract as a whole. The rules of statutory construction requires that all parts of the agreement be given effect. The court will not ignore the GFBE.
July 9th, 2008 at 10:47 pm
the NBA has to provide an acceptable remedy to them or they are condoning the fraud without remedy, which is not consistent with the claim of maintaining a healthy business.
If I am the judge, then I am asking the NBA what is acceptable to them, and why Schultz would be in any different than any other selling owner with personal preferences.
July 10th, 2008 at 12:06 am
Marsha won’t be making a ruling in this case either. There will be a settlement. The question is will there be a guarantee by the NBA to put a team in Seattle.
July 10th, 2008 at 3:07 am
When this “intervention” came out many people thought it was Stern confirming hat Schultz has a case, and therefore the NBA trying to stop the continuation of the suit. While I agree it’s a sign of Stern panicing, I don’t think that has to do with a fear of Schultz winning, but a fear of the NBA being brought to court, being exposed, and possibly embarrassed. I think Stern will ensure this doesn’t go to court, even if that means promossing Seattle a team in the future.
Schultz will see a deadline for reaching a settlement as the hour before the court ruling, however, Stern will see the deadline as the hour before court is scheduled to begin (with the possibility of an earlier deadline to avoid dispositions, etc.). Either way, the deadline isn’t going to be this year, but next year sometime (assuming the case is scheduled for Spring 2009).
By that time the Hornets or the Grizzlies should be about ready to move. Probably the attendance opt-out clause of the Hornets will kick in. However, now that OKC is occupied I’m not sure that their owner really wants to own a team at that point (considering I think he wanted to move to OKC), therefore he might be willing to sell.
Also, we know that Schultz’s goal isn’t single-minded about getting the Sonics back, he just wants NBA in Seattle. We know this because he said he feels his case (not the statement made by the NBA from the City/Sonics settlement) is the best way to ensure a future of the NBA (Note: not the SONICS) in Seattle. Therefore, he’ll likely accept a settlement with the NBA to bring another team, albeit not the Sonics, to Seattle.
Sounds great? My problem is I’m of the mentality “Sonics or bust”. I either want the Sonics back or no team. Therefore I think the new purpose of SOS should be to apply pressure to Schultz not to accept a settlement, but to push for the Sonics themselves.
July 10th, 2008 at 3:17 am
The filing by the NBA does not state Schultz doesn’t have a right to sue the PBC. We know this for 3 reasons: #1 It would have come out a long time ago when Schultz filed his suit. #2 It would be inconsistent, considering they signed of on the BCoS’s sale to the PBC, and on the PBC/Seattle settlement, and #2 because why would Schultz include a “good faith” clause, then sign away his ability to sue to enforce it?
The purpose of this intervention is to ensure (in the NBA’s perspective) that if Schultz wins that they maintain control over the selection of a new owner process. Therefore, I believe this filing actually helps Schultz and his case, and here’s why:
Without the NBA getting involved, Pechman may have been intimidated by the prospect of ruling in favor of Schultz and trying to return the team to him. Seriously (it may seem weird to say a federal judge is intimidated), but considering what she would be proposing: moving a huge corporation, with many employees BACK from OKC, where they had just moved a year before, breaking the OKC lease, and any and all contracts the PBC made with OKC businesses, and who would assume all those buy-out costs? It would have been a huge task, one that could easily be avoided with a “lets just give Schultz money”.
Well, now that the NBA is involved, they will have to propose a new system of finding a new owner, one that conforms to their bylaws. Therefore, they’re already working out a solution for Pechman. This will make a Schultz victory more likely because the resolution will already be sorted out.
July 10th, 2008 at 3:23 am
Call it pathetic, but at this point getting the Sonics back is almost a secondary-priority at this point. right now I’m much more interested in exposing Stern, embarrassing Bennett, and proving all the OKC fans wrong.
Of course I want the Sonics back, don’t get me wrong, but I’m not holding my breath. Instead, I want Schultz to continue with his case to expose the Stern-Bennett collusion, cost Bennett a lot of money (settlement money, legal fees, etc.), get Stern either fired or at least tarnish his reputation in the history books, and show all those OKC fans who we’ve had to bare with on forums, blogs, and message boards, that fraud and deceit are illegal, and ARE grounds for a reversal.
Is that sad?
July 10th, 2008 at 6:33 am
“I’m much more interested in exposing Stern, embarrassing Bennett, and proving all the OKC fans wrong.”
—————————————-
While I agree 100% with these sentiments — I have a couple of comments. Getting the Supes back would supercede the above in my book (as I’m sure it would for most folks around here) and I have to keep reminding myself that the OKC trolls represent a tiny/minute faction of their community. They sure as heck were annoying and I’d flat out love to be the eventual winner — but as a percentage there weren’t that many trolls. At least those are my opinions.
July 10th, 2008 at 6:52 am
“Let’s not forget noodling in the muck and the mud for oversized catfish.”
OMG. Why didn’t I think of that. The Okie Noodlers. I will forever call them that whatever their official name may be.
The Flaming Lips song for the Okie Noodling soundtrack is the sweetest song about masturbation you’ll ever hear.
July 10th, 2008 at 7:43 am
NBA wants to be a party. Boo-hoo david stern, boo-hoo
July 10th, 2008 at 7:51 am
Would you be happy with a relocation team if it means that all of the Sonics history, colors, name, etc., then stays in OKC per the settlement agreement?
July 10th, 2008 at 8:25 am
Hans wrote, “The purpose of this intervention is to ensure (in the NBA’s perspective) that if Schultz wins that they maintain control over the selection of a new owner process.” That is how I read it.
I really enjoyed the astute observations of Mr. Baker, Dick Tate, Hans, Moffet, Guess Who, McCoy and others who posted on this thread.
I also agree with Seasontixsince69 that this is not about the OKC basketbally fans. Like Hans, I am very interested in exposing Stern and financially punishing those who committed fraud. Vindication is nice. But, my main priority is still to see the original Sonics team returned to Seattle.
Schultz should be urged by SOS as a group not to settle. To the extent we can have some impact, we need to let Schultz know that we want the original team back. Because we were mushy on this issue, we enabled the mayor to stab us.
I know that Schultz will likely settle at some point, probably for less than the original team. It is a fact of life. In the meantime, we need to make a unified public stand on getting back the real Sonics.
How would you feel if someone forcefully took your child and told you that in a few years you can adopt a perfectly adequate child from some other parents if you build a new house?
July 10th, 2008 at 8:47 am
“How would you feel if someone forcefully took your child and told you that in a few years you can adopt a perfectly adequate child from some other parents if you build a new house?”
Devastating analogy.
July 10th, 2008 at 12:13 pm
I have no idea how accurate this is but it’s funny regarding the team’s new name.
http://withleather.uproxx.com/post.phtml?pk=6301
July 10th, 2008 at 1:14 pm
I thought Thundercats was a joke. I mean, it’s a joke, and I thought it was in jest.
July 10th, 2008 at 1:36 pm
“How would you feel if someone forcefully took your child and told you that in a few years you can adopt a perfectly adequate child from some other parents if you build a new house?”
“Devastating analogy.”
To carry the analogy one step further, consider an expansion team as equivalent to adopting an embryo. An expansion team will not be allowed high lottery picks for some years, which is like trying to stunt the growth of a baby.
July 10th, 2008 at 2:34 pm
“I think Stern will ensure this doesn’t go to court, even if that means promossing Seattle a team in the future. ”
Yes, isnt this the goal now?
July 10th, 2008 at 2:36 pm
And Brian’s thread is now gone…
July 10th, 2008 at 2:47 pm
Anybody ever consider the following question?
Do the following facts:
1. The NBA BOG is the party that must approve ownership transfers and franchise relocations
and
2. The NBA BOG is composed entirely and exclusively of team owners
constitute a conflict of interest? In the sense of the fox guarding the chicken coop? The owners vote solely to protect their own interests, not the interest of the league as a collective.
Can you imagine if the BOG had to include a representative of each host city as well, how differently all the votes would come out? The cities are directly impacted by decisions of the BOG; should they not be represented?
July 10th, 2008 at 2:49 pm
I was about to post in the most recent thread but it vanished…
Anyone catch Brian on KJR during the last hour?
Get ready to hammer your Electeds (again) - It’s Key Arena or bust (again).
Good luck with that. With our area’s NBA fanbase now reduced to a skeleton crew, the noise heard by the politicians will sound like a gnat.
That Mayor sure makes a good salesman too, by once again refering to the NBA’s broken business model on the radio today.
July 10th, 2008 at 3:02 pm
“Anybody ever consider the following question?
Do the following facts:
1. The NBA BOG is the party that must approve ownership transfers and franchise relocations
and
2. The NBA BOG is composed entirely and exclusively of team owners
constitute a conflict of interest? In the sense of the fox guarding the chicken coop? The owners vote solely to protect their own interests, not the interest of the league as a collective.”
How are you defining the league as a collective?
July 10th, 2008 at 3:03 pm
Can you imagine if the BOG had to include a representative of each host city as well, how differently all the votes would come out? The cities are directly impacted by decisions of the BOG; should they not be represented?
- I don’t like the NBA…but they are a corporation and deserve the right to decide who joins their club…no different than my company’s BoD deciding who will be the next SR VP or a Law Firm deciding who becomes a partner.
July 10th, 2008 at 3:31 pm
DT at 2:49… I did not hear BR or the mayor… but I agree with your comment that another effort to rally Sonics fans to campaign for tax money for an arena is not going to be incredibly tough to pull off. Too many fans feel to burned by the NBA to want them back - and too many fans feel betrayed by Nickels to want to trust him. And many fans find the vision to build something so we can take a team from another city very distasteful and even hypocritical.
July 10th, 2008 at 3:33 pm
Sorry… above should be… “for an arena is going to be incredibly tough”
July 10th, 2008 at 3:41 pm
I think if Ballmer & Nickels want to try and get an NBA team in the seattle center - fine. But let them do it. They were the 2 main parties that worked together to decide to abandon the current Sonics team - Nickels made that decision within the context of discussions with Ballmer & Co. - they made the decision to settle the lease case - let them solve their next problem.
Nickels decided to lie and betray the previous Sonics team and their fans. He betrayed SOS. He should expect to move on without those fans support.
If Ballmer wants to do it - he & his friends have the money - let them do it.
If he does - I might enjoy some NBA hoops someday in seattle. Or by then I may lose interest.
If not - I grieve and move on - let the NBA take their sorry screwed up league somewhere else.
I know many of you who still visit this sight are more of the mind of ….”Let’s work now to get a new arena and team ASAP.” Maybe I’ll move into that place but for now I’m just not there.
July 10th, 2008 at 3:50 pm
“How are you defining the league as a collective? ”
N.B. Associasion, bound by agreements, a private party, entitiled to act like any other club. They are not a public company traded on NYSC, it is Bart Simpson’s tree fort, they can pull up the ladder whenever they want.
What they will not do is make rules that exclude current owners or their situations. They do have rights to accept or reject changes to the franchises and the agreements.
There are all kinds of things they can do as a private business that a public business has to do, like file a 10Q stating financials. The individual owners have to act according to the business they run their franchise in, Ackerly AK was a public company and the Sonics financials were part of their Ackerly Communications FEC filings. Private owners don’t have to report anything to any body but the league and their own wallets.
The NBA could create a rule that does almost anything, what they can not do is rule the law before, outside of, or after owning a team. Aubrey got fined, the league has the rule, right, power, to do that. He accepted the rules when signing up to buy.
Committing fraud before is not something the league can make a rule about, remedies that involve league activity is their right to argue, if they do not have a rule for this given situation then they can propose one and vote on it.
Still, fraud compelled the Schultz group to sign away rights to the private group, those signatures are null. NBA better figure out a remedy fast, or the government will step in and say they are begging for public money, acting private when they choose, and impose a ruling that isn’t written in the league rules.
Howard could be holding the team until a sale happens, he might have to amend his case.
July 10th, 2008 at 3:54 pm
I loved how Nickels said that it was a cheap shot for Softy to bring up the fact that Nickels has only been to two Sonics games.
July 10th, 2008 at 3:56 pm
new thread is up in the sky, like NHL pie
July 10th, 2008 at 4:09 pm
I agree that it is a cheap shot. Why does Nickels have to be a sports fan?