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Shelly Sterling petitions Superior Court to complete sale of Clippers

Professional BasketballTrials and ArbitrationDonald SterlingJustice SystemLos Angeles ClippersBasketballNBA
Shelly Sterling's lawyers say failure to complete sale would cause 'a significant loss' to family trust
Petition gives details of examinations that led to Shelly declaring husband unable to handle business affairs
Sterling dispute is complicated by Donald's lawsuit against NBA and notice that he revoked the family trust

Shelly Sterling’s lawyers on Wednesday asked the Los Angeles County Superior Court to not only affirm her sale of the Clippers but to also order the deal completed to prevent a “significant loss” to the family trust that holds the team, should her husband, Donald, be allowed to block the transaction.

Shelly Sterling’s probate petition asks for an expedited hearing, saying that if the deal is not completed by Sept. 15 the NBA can be expected to renew its effort to seize the team from the Sterling family and sell it at auction.

Such a seizure would probably result in a substantially lower sale price and harm not only Shelly Sterling, 79, but her 80-year-old husband, who purportedly is unable to manage his own business affairs, she stated in papers filed with the court.

By midmorning Wednesday it was unclear when the matter would be heard by a judge, though experts said they expected the matter to be scheduled for a hearing one to three weeks from now.

Shelly Sterling’s petition lays out the history of her rapid takeover of the team last month and the sale of the Clippers to former Microsoft Chief Executive Steve Ballmer for a record $2 billion. She said that the NBA’s looming June 3 deadline to strip the Sterlings of ownership may have helped drive up the sale price, which was nearly four times the previous high paid for an NBA team.

“In fact, the fast track sale — prompted by the looming June 3 hearing to terminate [Clippers] NBA membership — likely heightened the interest for the Clippers and contributed to the record sale price,” Sterling’s lawyers contended in the court filing.

The papers also provide details, for the first time, of the examinations that led Shelly Sterling to declare that her husband was not competent to handle his business affairs and for her takeover of the family trust that owns the Clippers.

Shelly Sterling got Donald Sterling to agree to see a doctor in May, and psychiatrist Dr. Meril S. Platzer got Donald to agree to get positron emission tomography (PET) and computerized tomography(CT) scans at Cedars Sinai Medical Center, according to the court filings.

Platzer examined Sterling on May 19 and said in a letter on May 29 (the day that Ballmer signed the deal to buy the Clippers) that the team co-owner could not carry out his duties as a result of “an impairment of his level of attention, information processing, short-term memory impairment and ability to modulate mood, emotional lability and is at risk of making potentially serious errors of judgment.”

Dr. James E. Spar saw Donald Sterling on May 22 and in a letter five days later said he had “cognitive impairment” that put him “at risk of making potentially serious errors of judgment, impulse contriol and recall in the management of his finances and his trust.” Spar added that Donald Sterling “is substantially unable to manage his finances and resist fraud and undue influence and is no longer competent to act as trustee of his trust.”

A third psychiatrist, Dr. Stephen L. Read, confirmed the methodology used by the other two.

Sterling’s attorney, Max Blecher, has called claims that Sterling cannot carry out business functions “absurd” and promised that he would offer a spirited rebuttal to the claims by the doctors and Shelly Sterling’s attorneys.

In a declaration filed in support of Shelly Sterling’s petition, NBA general counsel Richard Buchanan said the league, Clippers and Sterling Family Trust would suffer “substantial harm” if the sale to Ballmer wasn’t “promptly consummated.”

“Every day Mr. Sterling remains an owner of the Clippers causes additional damage to the team, the trust, and the NBA,” Buchanan said, adding that morale among Clippers employees is low and some have considered resigning if the sale isn’t executed soon.

Complicating an already byzantine dispute, which includes Donald Sterling’s $1-billion lawsuit claiming that the NBA treated him unfairly, is an additional action by Sterling — a June 9 notice stating that he had revoked the family trust.

Such a revocation, if it is validated, could result in the assets from the trust promptly being distributed to both Sterlings as community property. That presumably would mean that Donald Sterling would maintain his half of the Clippers ownership and would be in a position to torpedo the May 29 sale to Ballmer.

But Shelly Sterling’s lawyers argue that her previous action in asserting her position as sole trustee makes Donald Sterling’s action untenable and that, in any event, the trust is obligated to “wind up” its previous affairs before any revocation. That wind-up would include the sale of the Clippers, the lawyer argue.

Shelly Sterling’s lawyers say that her sale can either be approved, or the team will likely be seized by the NBA and sold for a price lower than the $2 billion she already got. A third option would be to fight the NBA’s attempt to take over the team, something Donald Sterling seems to prefer.

But Shelly Sterling’s court papers say that option would be “costly and protracted with little likelihood of success.”

Copyright © 2014, Los Angeles Times
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Professional BasketballTrials and ArbitrationDonald SterlingJustice SystemLos Angeles ClippersBasketballNBA
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