Post by WpgJets2008 on Aug 18, 2009 9:05:43 GMT -5
JUDGE ISSUES RULING IN OWNERSHIP DEAL OF THRASHERS AND HAWKS
Canadian Press Aug 17, 2009
www.tsn.ca/nhl/story/?id=288027
ATLANTA -- A Maryland judge has ruled the eight owners of the Atlanta Hawks and Atlanta Thrashers are back in business under the same operating agreement they shared before their split in 2005.
Montgomery County Circuit Court Judge Durke G. Thompson ruled Monday that the contract the owners reached that would allow the seven owners to buy out Boston-based Steve Belkin was too ambiguous.
The judge encouraged the owners to settle the feud, based in part on a disagreement on the value of Belkin's 30 per cent share of the teams, without outside intervention.
Also at stake are the operating rights to Philips Arena, where the Hawks and Thrashers play.
Michael Gearon, one of the Atlanta-based owners, celebrated Thompson's decision, delivered in a 38-page ruling.
"We won on every single point," Gearon said.
"The court did exactly what we asked it to do. We are back under the operating agreement which we think is a good agreement. We no longer have any obligation to buy out Belkin nor does Belkin have any right to purchase the Hawks and Thrashers."
Belkin can appeal the ruling.
The ownership split began in 2005 over Belkin's objection to the Hawks' decision to trade Boris Diaw, two first-round draft picks and a US$4.9 million trade exception to the Phoenix Suns for guard Joe Johnson.
The ownership group, led by Gearon and Rutherford Seydel in Atlanta and by Washington businessmen Bruce Levenson and Ed Peskowitz, had the support of NBA commissioner David Stern. Gearon replaced Belkin as the NBA governor in the group.
Belkin asked the other owners to buy out his 30 per cent share of the partnership called Atlanta Spirit LLC. But the parties could not agree on the value of Belkin's share. Then they could not agree on who should set the value.
Belkin, backed by a 2006 Maryland circuit court ruling that was later overturned, then contended he was entitled to buy out his fellow owners at cost and take over the teams.
Thompson said the eight should closely consider how they might reopen the negotiation for the seven to buy out Belkin's interest. The judge said "the parties would be well served if they were to reach an agreed buyout price on their own without relying on investment bankers to make such a vital decision for them."
Added Thompson: "Much of what has become a stumbling block in this case would be avoided had this been the procedure originally adopted."
~~~
Editor's Notes:
With the 8 owners now having only their original contract to guide them, assuming there is no Belkin appeal or it fails, then the waters are less murky for a deal to buy out Belkin to occur.
This means all the 8 need to do is to arrive at a suitable figure for the value of the entire contract, then use 30% as the cost to buy out Belkin. As part of that valuation exercise, the values for the Hawks, Thrashers and all lease entitlements would have to be set and agreed to by the parties.
It really surprises me that sucha huge deal would not have this formula explicitly spelled out to avoid messes exactly like this.
Whereas the Hawks have a long term lease at Phillips Arena, the Thrashers aren't under such obligations since the NBA is much higher profile in that city than the NHL just like when the lease was signed.
Once the Thrashers' value is set by the 8, it is possible that they might sell the hockey team to raise the capital to buy out Belkin's 30% interest. This would allow the other 7 owners clear ownership of the Hawks in Atlanta, the money losing Thrashers would be out of the Phillips Arena and they wouldn't even need to dig into their pockets to rid themselves of Belkin.
So the moneytrail lines up with a sale and potential relocation of the Thrashers as quickly as these 8 can agree on values. Not exactly the best way to ensure your NHL team stays in its' city!
Chris
Canadian Press Aug 17, 2009
www.tsn.ca/nhl/story/?id=288027
ATLANTA -- A Maryland judge has ruled the eight owners of the Atlanta Hawks and Atlanta Thrashers are back in business under the same operating agreement they shared before their split in 2005.
Montgomery County Circuit Court Judge Durke G. Thompson ruled Monday that the contract the owners reached that would allow the seven owners to buy out Boston-based Steve Belkin was too ambiguous.
The judge encouraged the owners to settle the feud, based in part on a disagreement on the value of Belkin's 30 per cent share of the teams, without outside intervention.
Also at stake are the operating rights to Philips Arena, where the Hawks and Thrashers play.
Michael Gearon, one of the Atlanta-based owners, celebrated Thompson's decision, delivered in a 38-page ruling.
"We won on every single point," Gearon said.
"The court did exactly what we asked it to do. We are back under the operating agreement which we think is a good agreement. We no longer have any obligation to buy out Belkin nor does Belkin have any right to purchase the Hawks and Thrashers."
Belkin can appeal the ruling.
The ownership split began in 2005 over Belkin's objection to the Hawks' decision to trade Boris Diaw, two first-round draft picks and a US$4.9 million trade exception to the Phoenix Suns for guard Joe Johnson.
The ownership group, led by Gearon and Rutherford Seydel in Atlanta and by Washington businessmen Bruce Levenson and Ed Peskowitz, had the support of NBA commissioner David Stern. Gearon replaced Belkin as the NBA governor in the group.
Belkin asked the other owners to buy out his 30 per cent share of the partnership called Atlanta Spirit LLC. But the parties could not agree on the value of Belkin's share. Then they could not agree on who should set the value.
Belkin, backed by a 2006 Maryland circuit court ruling that was later overturned, then contended he was entitled to buy out his fellow owners at cost and take over the teams.
Thompson said the eight should closely consider how they might reopen the negotiation for the seven to buy out Belkin's interest. The judge said "the parties would be well served if they were to reach an agreed buyout price on their own without relying on investment bankers to make such a vital decision for them."
Added Thompson: "Much of what has become a stumbling block in this case would be avoided had this been the procedure originally adopted."
~~~
Editor's Notes:
With the 8 owners now having only their original contract to guide them, assuming there is no Belkin appeal or it fails, then the waters are less murky for a deal to buy out Belkin to occur.
This means all the 8 need to do is to arrive at a suitable figure for the value of the entire contract, then use 30% as the cost to buy out Belkin. As part of that valuation exercise, the values for the Hawks, Thrashers and all lease entitlements would have to be set and agreed to by the parties.
It really surprises me that sucha huge deal would not have this formula explicitly spelled out to avoid messes exactly like this.
Whereas the Hawks have a long term lease at Phillips Arena, the Thrashers aren't under such obligations since the NBA is much higher profile in that city than the NHL just like when the lease was signed.
Once the Thrashers' value is set by the 8, it is possible that they might sell the hockey team to raise the capital to buy out Belkin's 30% interest. This would allow the other 7 owners clear ownership of the Hawks in Atlanta, the money losing Thrashers would be out of the Phillips Arena and they wouldn't even need to dig into their pockets to rid themselves of Belkin.
So the moneytrail lines up with a sale and potential relocation of the Thrashers as quickly as these 8 can agree on values. Not exactly the best way to ensure your NHL team stays in its' city!
Chris