Donald Sterling opens third front in battle over Clippers ownership
Donald Sterling opened a third legal front Tuesday in his fight to maintain control of the Clippers, alleging in another lawsuit that he remained the team’s rightful owner and demanding that his wife’s $2-billion sale of the team to former Microsoft chief executive Steve Ballmer be blocked.
The new action came on the same day that Dick Parsons, the interim team chief executive appointed by the NBA, reported that he feared that the team could fall into a “death spiral” if fans, sponsors, players and coaches flee should Sterling remain with the team.
Parsons testified in Los Angeles County Superior Court that he was particularly concerned about the possible departure of Clippers Coach Doc Rivers, who he said had suggested in at least three conversations that he would probably leave if the team wasn’t sold.
“If Mr. Sterling continues to own the team, he doesn’t think he wants to continue as coach,” said Parsons, the former Time Warner chief executive who took over as Clippers boss in early May after former chief executive Andy Roeser went on indefinite leave.
Parsons told the probate court that the departure of Rivers, who is also the team’s president of basketball operations, would be a “disaster” for the team.
“Doc is really the guy who leads the effort. He is the coach. He is the grown-up,” Parsons said. “The team believes in him and admires him and loves him. And if he were to bail because of other circumstances … that is going to accelerate the death spiral.”
Shelly Sterling’s attorneys called Parsons to bolster their request that Superior Court Judge Michael Levanas not only validate her takeover of the trust that owns the Clippers but also order that her actions remain in force, regardless of appeals.
To win such an unusual order, Donald Sterling’s wife of nearly 59 years must prove that the family trust would suffer irreparable harm without the intervention.
Donald Sterling’s latest lawsuit suggested, in contrast, that he was the one who had been abused by a whirlwind series of actions triggered in late April, when the website TMZ broadcast audio of Sterling telling a female companion not to bring black people to Clippers games.
A few days after the recording of the private conversation went public, NBA Commissioner Adam Silver fined Sterling $2.5 million, banned him for life from the league and asked other owners to oust him as owner of the Clippers. The league dropped the latter action when Shelly Sterling declared herself the sole trustee and agreed to sell the team.
Donald Sterling’s filing Tuesday stated that the ongoing probate trial would resolve only issues about the family trust, andthat he still had claims based on his ongoing control of LAC Basketball Club Inc., the corporation that owns the team.
“Who has the authority going forward? Our contention is that it’s only Donald Sterling,” said his attorney, Bobby Samini. “There would also have to be a determination at the corporate level for a sale to be completed.”
While Shelly Sterling acted on May 29 to remove her husband from the family trust, after a neurologist and a psychiatrist found him mentally unfit, Donald Sterling in effect responded: I can’t be fired because I quit.
His lawsuit described how he placed the team in the family trust in 1998. On June 9 he served formal notice that he had revoked the trust, which restored ownership of the team to him as sole shareholder of the LAC Basketball Club, the lawsuit said.
“As sole shareholder of LAC, Plaintiff has the right to dispose of, sell, or retain the interest in LAC as he sees fit, irrespective of [Shelly Sterling’s] community property interest,” the lawsuit contended.
Sterling accused his wife, the NBA and Silver of fraud, breach of contract, breach of fiduciary duty and other violations for pushing a sale of the team despite his continuing ownership.
He also charged that the defendants acted with “complete and utter disregard” for his “psychological, financial, and emotional attachment to a team he owned for 33 years, which resulted in the infliction of severe emotional distress.”
The suit asked for an injunction to block the sale to Ballmer.
Sterling previously filed an antitrust lawsuit in May in federal court, alleging that the NBA had improperly punished him for his comments. Other owners and NBA employees who misstepped had received much less onerous treatment, the lawsuit said.
The NBA declined to comment.
The testimony from Parsons drew the most attention Tuesday because the interim Clippers boss has kept a low profile — spending only a few days a week in L.A. and declining interviews.
He said he had heard from players concerned about Sterling’s possible return, as well as many sponsors who said their advertising with the team was contingent upon Sterling staying away.
“The basic message is we are in, so long as Donald Sterling is out,” Parsons said, citing Kia Motors and the Mandalay Bay resort in Las Vegas as among advertisers who wanted no association with Sterling.
Parsons called the $2 billion that Ballmer was willing to pay a “knockout price” that goes far above the value of the team based strictly on its balance sheet. It would be difficult to duplicate the record price if Sterling manages to kill the deal, he said.
“If Steve goes away,” Parsons testified, “I don’t know how you get to this price again.”
On cross-examination by Sterling’s lawyer, Max Blecher, Parsons acknowledged that some of the purported threats to the Clippers were speculative. The Clippers, for example, are selling just as many season tickets in this off-season as last. And with increased prices, the team’s early ticket revenue is actually up, Parsons conceded.
Parsons also admitted that he couldn’t be certain that the Clippers would go for less if they were put up for sale again.
Two expert witnesses testified during most of the afternoon session.
Anwar Zakkour of Bank of America Merrill Lynch described how he helped run Shelly Sterling’s sale of the team, saying that the hurried timeline — designed to beat an NBA deadline to seize the Clippers — seemed to help drive up the price.
He said the prospective buyers, including Ballmer, had no chance to “play games” by judging other possible bids.
The bidding, known by the code name “Project Claret” inside the bank, produced prices well above the $1 billion to $1.3 billion initially projected. “Whether you wanted to call it a slam dunk or a home run, none of us believed we would get to $2 billion when we started,” Zakkour testified.
The courtroom combat took a lighter turn when Blecher asked Zakkour if he thought Ballmer was “nuts” for paying so much for the Clippers. Shelly Sterling’s attorney, Pierce O’Donnell, objected that “nuts” was “vague and ambiguous.”
Donald Sterling’s lawyers followed with their own witness, former sports executive Dean Bonham, who said that the Clippers could be sold for more than $2 billion and that the abbreviated sale process suppressed the offers.
O’Donnell tore into Bonham’s credentials, charging the witness with falsely claiming that he had been president of the NBA’s Denver Nuggets. In response, the consultant explained that he served as the team’s president of sales and marketing.
The trial is set to continue Wednesday and Donald Sterling’s lawyers plan to call a psychiatrist who evaluated Sterling. They also may question Shelly Sterling again.
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