Surprising no one, what's left of Atlanta Spirit settled their lawsuit with their local lawyers at the King and Spalding firm over what ASG called poor representation over their legal malpractice lawsuit against former ASG partner Steve Belkin.
Steve Collins, who represents the firm, said Wednesday that King & Spalding and Atlanta Spirit settled the US$195-million.
Spirit said in a January lawsuit that the firm negotiated a "fatally flawed contract" to end the Belkin dispute.
Collins said the terms of the settlement were confidential. The Atlanta Spirit did not immediately comment.
The HQ thinks it was aomething along the lines of recovering legal fees in the process- and that's about it... the sooner that Spirit is away from sports, the better off we all are...
Showing posts with label Steve Belkin. Show all posts
Showing posts with label Steve Belkin. Show all posts
Wednesday, September 14, 2011
Wednesday, December 22, 2010
BREAKING: Atlanta Spirit Ownership Suit Settled
From Atlanta Spirit their ownselves...
The lawsuit among the owners of the Atlanta Hawks and Atlanta Thrashers has been settled. Terms of the settlement are confidential. Going forward, Michael Gearon and Bruce Levenson will serve as managing partners of the Atlanta Hawks, Atlanta Thrashers and Philips Arena...
More when we know more...
But the HQ knows this is the first step to divesting on the whole...
Kristi Swartz of the AJC writes that part of the deal, understandably, is to buy out Belkin's 30-percent stake...
Swartz, Chris Vivlamore and/or Ken Sugiura caught up with partner Bruce Levenson:
"I think if you talk to anyone in either organization, they will tell you that this lawsuit has had zero impact. Zero," Levenson said. "At the end of the day, we had a business partner who we were in a dispute with and we have settled that dispute. It may sound a lot more complicated but that's really what happened."
The ownership group has hemorrhaged money over the last two seasons- losing, by some reports, close to US$50-million. There have been cash calls to cover margins and the idea that they're looking for investors- which Levenson has not denied.
Also, Philips is looking to get out of their sponsorship deal of the arena. Once they find someone else, they can check out themselves.
Now that everyone is under the same roof, look for an out and a move.
Not immediately, but down the road...
The lawsuit among the owners of the Atlanta Hawks and Atlanta Thrashers has been settled. Terms of the settlement are confidential. Going forward, Michael Gearon and Bruce Levenson will serve as managing partners of the Atlanta Hawks, Atlanta Thrashers and Philips Arena...
More when we know more...
But the HQ knows this is the first step to divesting on the whole...
Kristi Swartz of the AJC writes that part of the deal, understandably, is to buy out Belkin's 30-percent stake...
Swartz, Chris Vivlamore and/or Ken Sugiura caught up with partner Bruce Levenson:
"I think if you talk to anyone in either organization, they will tell you that this lawsuit has had zero impact. Zero," Levenson said. "At the end of the day, we had a business partner who we were in a dispute with and we have settled that dispute. It may sound a lot more complicated but that's really what happened."
The ownership group has hemorrhaged money over the last two seasons- losing, by some reports, close to US$50-million. There have been cash calls to cover margins and the idea that they're looking for investors- which Levenson has not denied.
Also, Philips is looking to get out of their sponsorship deal of the arena. Once they find someone else, they can check out themselves.
Now that everyone is under the same roof, look for an out and a move.
Not immediately, but down the road...
Friday, February 19, 2010
Steve Belkin Needs Two Million Dollars
((HT: AJC/Swartz))
Or he risks losing his stake in Atlanta Spirit, LLC... according to Kristi Swartz's piece in the Atlanta Journal-Constitution
Montgomery County ((MD)) Circuit Court documents reveal that of the US$25.8-million that represents his 30-percent share, he's lacking in that amount to satisfy cash calls and/or capital calls since the court case started back in 2005.
Gee... something else to argue over...
To fill space, the HQ figures it should show you one of the best theme songs dealing with the Atlanta Hawks from 1987- one of the properties Atlanta Spirit would grab fifteen years later...
"The Atlanta Air Force" from Tom Grose and The Varsity...
((HT: Youtube/hotlantahawks))
Harry The Hawk never ages, you realize that...???
Or he risks losing his stake in Atlanta Spirit, LLC... according to Kristi Swartz's piece in the Atlanta Journal-Constitution
Montgomery County ((MD)) Circuit Court documents reveal that of the US$25.8-million that represents his 30-percent share, he's lacking in that amount to satisfy cash calls and/or capital calls since the court case started back in 2005.
Gee... something else to argue over...
To fill space, the HQ figures it should show you one of the best theme songs dealing with the Atlanta Hawks from 1987- one of the properties Atlanta Spirit would grab fifteen years later...
"The Atlanta Air Force" from Tom Grose and The Varsity...
((HT: Youtube/hotlantahawks))
Harry The Hawk never ages, you realize that...???
Tuesday, August 18, 2009
Atlanta Spirit, LLC: Business As Usual, Business Unusual
((HT: AJC/Sekou Smith))Okay... for those of us at OSG HQ, it's time for the post-trial post-mortem. Where only this particular group of owners ((pictured, thanks Brant Sanderlin/AJC)) can accomplish something by accomplishing nothing.
The Maryland decision has brought this gang of eight to the standstill that caused the whole mess almost four years ago.
The AJC's Sekou Smith caught up with Michael Gearon, Junior.Bully for him...
“I can’t speak for what Steve will or won’t do,” Gearon said. “But I can tell you that one thing people fail to realize is that over the course of these last four years, we’ve been operating these franchises and making decisions ... which Steve has participated in.
“Steve has actively participated in meetings that we’ve had, in which our [general managers] have made recommendations and there hasn’t been a situation where there was contention and we did not go in a direction our [general managers] wanted to go.”
Should he decide to stay in the group as a minority owner, Belkin would be required to pay his partners $25.8 million, according to court documents, which represents his 30 percent share of cash calls made during litigation.
He could appeal the court’s decision, but he would likely have to post a multi-million-dollar bond, at the court’s discretion.
Or Belkin could also exercise what amounts to an opt-out clause in the Spirit’s original partnership agreement and ask his partners to buy him out.
Judge Durke G. Thompson’s 38-page ruling actually encourages the owners to settle the feud without the aid of investment bankers or other outside parties.
That might have happened four years ago had the NBA, and specifically Commissioner David Stern, not made it “clear that it desired the Belkin interest to be bought out,” Thompson noted in his ruling.
We'll handle the rest of the conversation with asides...
Gearon also dismissed rumors that the Thrashers are for for sale, insisting that the Spirit is simply “looking for other investors,” the same way Falcons owner Arthur Blank did recently.
(("We'd like to dilute the voting pool by that-much-more owners and investors and make the decision-making process that much more difficult. Does anyone have Tom Gagliardi's phone number...?"))
“The biggest benefit from [Monday’s] decision is the black cloud that is no longer over Bruce Levenson, Ed Peskowitz and myself, with respect to the personal obligation to buy out Belkin,” Gearon said.
(("Yeah, we'd just like someone else to do it. That's why we're looking for other investors."))
For fans weary of another round of legal maneuvering, Gearon-Peskowitz-Levenson lawyer Steven Estep cautioned that Monday’s ruling does not open that door.
“That would be the wrong conclusion to draw, because this legal process from the last four years has all spawned from that purchase and sale agreement that has now disappeared,” he said.
(("But we're preparing for a Belkin appeal anyway."))
“There is no basis to start this process again. Now we are back to an operating agreement that is clear and unambiguous. It’s not going to lead to bad things.
“It’s the same as it was before. And that’s a good thing. It’s not going to lead to bad things. Belkin can stay in if he wants. He has to catch up on his cash calls, which I don’t think is a significant enough amount of money to alter the future of the franchises. Or he can exercise his put and ask the other owners to buy him out. It’s pretty cut and dry.”
(("But we're preparing for a Belkin appeal, anyway."))
The process has been mind-numbing, fatiguing, and mentally draining the entire time. The only solution is for the Gang Of Eight to pack it in as a group and find someone with passion and pockets to do it right...see Gagliardi as a reference point...
Something profoundly lacking in this morass...
Jeff Schultz in his op-ed about the whole thing came across a good point- which could be grounds for another lawsuit. Belkin was Governor of the Hawks at the time of the lawsuit, but his term expired. Could he fight to get that spot back in court...?
Knowing these "Wrong Way Corrigans" of professional ownership... you bet your ass.
This is just getting started... unless someone wants to just find a ruler for the Gang of Eight and get the whole thing over with once and for all...
Monday, August 17, 2009
Atlanta Spirit Still One Squad
((HT: AJC/Smith, Swartz))
"The feuding Hawks and Thrashers co-owners are still in business, now that a Maryland judge has scrapped an agreement between them saying the contract outlining how seven of the partners can buy out the eighth is too vague.
Boston-based partner Steve Belkin asked his partners to buy out his 30 percent stake in the teams in August 2005, a process that was supposed to take 125 days. The Spirit has been embroiled in a high-profile legal battle that has lasted more than three years.
The ruling, issued Monday afternoon, tossed out the initial purchase and sale agreement to buy out Belkin and keeps him in the partnership as a minority owner. The partners are now placed back in the same position they were in before August 2005.
Belkin, however, does have the right to appeal Monday's decision.
The eight-man ownership group bought the Hawks, Thrashers and Philips Arena operating rights from Atlanta-based Turner Broadcasting System in spring 2004.
The celebration was short-lived.
The group began squabbling over things such as who would speak publicly at events. Then Belkin wouldn't let the other owners into the Hawks' locker room or fly on the team plane.
The warring came to a head over how to trade for then Phoenix Suns' guard Joe Johnson, who has since become a three-time All-Star for the Hawks.
Belkin, who previously accused co-owner Bruce Levenson of player tampering, stepped down as the team's representative to the NBA and then asked that the seven others buy out his 30 percent share."
The case, should anyone be interested, is: Belkin v. HTPA Holding Co., 266748-V, Montgomery County Circuit Court (Rockville, Maryland).
Bizjournals is reporting annual revenue of Atlanta Spirit, LLC at $7-and-a-half million. Most of it, those of us at OSG HQ think, is still locked up in legal fees. We'd love to know how they're going to pull off successful franchises without being able to STILL spend any money...
Forbes Magazine, the last time they valued franchises, had the Thrashers at $158-million ((or 27th overall)) with an operating loss of just over $6-million on revenue of $70-million. Columbus, the Islanders, and Phoenix were the only three valued at a lesser amount.
We'd like someone to tell us how this is all going to work out, because simply it looks like it hasn't in the short-term and won't in the long-term.
Saturday, May 9, 2009
Owners Say Belkin Fixed The Numbers
((HT: Bloomberg via Howard Bloom))
Steven Belkin, who is suing his former co-owners of Atlanta’s professional basketball and hockey teams, manipulated the process for valuing his stake in a bid to force partners to buy him out at an inflated price, their lawyer said.
Jim Shea, representing seven owners who wanted to buy Belkin’s 30 percent stake in the Atlanta Hawks and Thrashers, said today that Belkin “carefully screened and selected the appraisers” and pressured them to come up with the highest possible price.
Belkin “directed the appraisers to just look at the assets, not the obligations,” Shea told Judge Durke Thomson in closing arguments of a three-month trial in state court in Rockville, Maryland.
Belkin agreed in August 2005 to sell his stake, sparking a 3 1/2-year legal battle over how much it’s worth. Citigroup Inc. first estimated the value at $288 million. JPMorgan Chase & Co. later put it at $463 million. Attorneys for the partners argued at trial that the stake was worth much less than Citigroup’s estimate when debt and other obligations were included.
Shea said Belkin unfairly benefited from his manipulation of the process, including being “tipped off” on the timing of the e-mail transmission of the Citigroup estimate. Under terms of the buyout agreement, this allowed Belkin to be first to object to the valuation, giving him the right to select the second appraiser, JPMorgan.
“Neither party contemplated even the possibility that both parties would object” to the valuation, Shea said. “They missed it, your honor. They just didn’t see it. There was no meeting of the minds.”
Shea asked the judge to send the parties back to the negotiating table to work out an acceptable price based on a new, impartial valuation.
John Fabiano, an attorney for Belkin, told the judge that his client had lawfully followed the rules on selling his stake in Atlanta Spirit LLC, the group that owns the National Basketball Association’s Hawks and National Hockey League’s Thrashers. Belkin shouldn’t be punished for acting more quickly than his onetime partners, Fabiano said.
The owners “are millionaires many times over, not unsophisticated widows and orphans,” he said. “It is simply not persuasive that they did not read the documents with care” including an e-mail message from Citigroup informing them that the appraisal was about to be sent, he said.
Fabiano asked the judge to use the JPMorgan valuation and order the partners to pay Belkin $143 million plus interest for his stake. The judge declined to say when he will rule.
Bernie Mullin, former chief executive officer for Atlanta Spirit, testified during the trial that the Hawks’ revenue was among the NBA’s lowest in the 2004-05 season, when the team lost 69 of its 82 games.
Atlanta Spirit lost $13 million and would have lost as much as $31 million had the Thrashers played that year, when the NHL season was canceled because of a labor dispute, Mullin said.
Belkin, who was once the lead investor in Atlanta Spirit, was forced out after he temporarily blocked the Hawks from acquiring guard Joe Johnson from the Phoenix Suns in 2005. He sued United Communications Group co-founder Bruce Levenson and the other owners, demanding that they buy his stake in the teams and in Philips Arena, where they both play.
A Time Warner Inc. unit was ordered in December to pay $281 million in damages to a Texas businessman for reneging on an oral agreement to sell him the Hawks and Thrashers.
Jurors in Atlanta found that Turner Broadcasting System improperly canceled a 2003 accord to sell the teams to David McDavid, a former Dallas car dealer. The teams wound up in the hands of Atlanta Spirit, a group of investors that included the son and son-in-law of TBS’s billionaire founder, Ted Turner.
The case is Belkin v. HTPA Holding Co., 266748-V, Montgomery County Circuit Court (Rockville, Maryland).
Steven Belkin, who is suing his former co-owners of Atlanta’s professional basketball and hockey teams, manipulated the process for valuing his stake in a bid to force partners to buy him out at an inflated price, their lawyer said.
Jim Shea, representing seven owners who wanted to buy Belkin’s 30 percent stake in the Atlanta Hawks and Thrashers, said today that Belkin “carefully screened and selected the appraisers” and pressured them to come up with the highest possible price.
Belkin “directed the appraisers to just look at the assets, not the obligations,” Shea told Judge Durke Thomson in closing arguments of a three-month trial in state court in Rockville, Maryland.
Belkin agreed in August 2005 to sell his stake, sparking a 3 1/2-year legal battle over how much it’s worth. Citigroup Inc. first estimated the value at $288 million. JPMorgan Chase & Co. later put it at $463 million. Attorneys for the partners argued at trial that the stake was worth much less than Citigroup’s estimate when debt and other obligations were included.
Shea said Belkin unfairly benefited from his manipulation of the process, including being “tipped off” on the timing of the e-mail transmission of the Citigroup estimate. Under terms of the buyout agreement, this allowed Belkin to be first to object to the valuation, giving him the right to select the second appraiser, JPMorgan.
“Neither party contemplated even the possibility that both parties would object” to the valuation, Shea said. “They missed it, your honor. They just didn’t see it. There was no meeting of the minds.”
Shea asked the judge to send the parties back to the negotiating table to work out an acceptable price based on a new, impartial valuation.
John Fabiano, an attorney for Belkin, told the judge that his client had lawfully followed the rules on selling his stake in Atlanta Spirit LLC, the group that owns the National Basketball Association’s Hawks and National Hockey League’s Thrashers. Belkin shouldn’t be punished for acting more quickly than his onetime partners, Fabiano said.
The owners “are millionaires many times over, not unsophisticated widows and orphans,” he said. “It is simply not persuasive that they did not read the documents with care” including an e-mail message from Citigroup informing them that the appraisal was about to be sent, he said.
Fabiano asked the judge to use the JPMorgan valuation and order the partners to pay Belkin $143 million plus interest for his stake. The judge declined to say when he will rule.
Bernie Mullin, former chief executive officer for Atlanta Spirit, testified during the trial that the Hawks’ revenue was among the NBA’s lowest in the 2004-05 season, when the team lost 69 of its 82 games.
Atlanta Spirit lost $13 million and would have lost as much as $31 million had the Thrashers played that year, when the NHL season was canceled because of a labor dispute, Mullin said.
Belkin, who was once the lead investor in Atlanta Spirit, was forced out after he temporarily blocked the Hawks from acquiring guard Joe Johnson from the Phoenix Suns in 2005. He sued United Communications Group co-founder Bruce Levenson and the other owners, demanding that they buy his stake in the teams and in Philips Arena, where they both play.
A Time Warner Inc. unit was ordered in December to pay $281 million in damages to a Texas businessman for reneging on an oral agreement to sell him the Hawks and Thrashers.
Jurors in Atlanta found that Turner Broadcasting System improperly canceled a 2003 accord to sell the teams to David McDavid, a former Dallas car dealer. The teams wound up in the hands of Atlanta Spirit, a group of investors that included the son and son-in-law of TBS’s billionaire founder, Ted Turner.
The case is Belkin v. HTPA Holding Co., 266748-V, Montgomery County Circuit Court (Rockville, Maryland).
Saturday, March 7, 2009
Atlanta Spirit Owners Still Arguing
And we still expect an appeal in there somewhere after this is all done...
The AJC's Kristi E. Swartz wraps up the two-week trial for us with no real shocks...
Both sides still think they're right, and still don't like each other very much...
"...lawyers will return on May 8 to make their final arguments before the judge makes his decision. That probably will take several additional weeks.
No matter which side the judge favors, an appeal is expected. The proceedings could leave the ownership of the professional teams and Philips Arena operating rights in limbo for another year or so.
Judge Durke Thompson has several options: Belkin gets his money and is one step closer to separating from a group he’s already been estranged from for years. Or, the seven others can pick an appraiser to evaluate the teams, and, again try to buy Belkin’s share.
Or, Thompson could say the contract was too murky and throw it out. The Spirit then could use a previous buyout agreement included in documents from when they bought the teams from Turner Broadcasting System as their roadmap."
Belkin thinks he's entitled to US$143-million. But Swartz brings up a more legitimate question:
Can either side wait the other out and still pay all the legal fees and retainers...?
Those of us at OSG HQ think Belkin can wait out the other seven. He may not get the US$143-million he thinks he's worth, but he may get a settlement that will cripple an already-hemorrhaging organization.
The losers as always are the fans of this- especially the Thrashers fans who have a franchise that is last in league salary cap figures- approximately US$43.4-million after all the trade dealine fiascos went through. And when Ilya Kovalchuk is traded on draft day, all hell will break loose.
That's just us...
The AJC's Kristi E. Swartz wraps up the two-week trial for us with no real shocks...
Both sides still think they're right, and still don't like each other very much...
"...lawyers will return on May 8 to make their final arguments before the judge makes his decision. That probably will take several additional weeks.
No matter which side the judge favors, an appeal is expected. The proceedings could leave the ownership of the professional teams and Philips Arena operating rights in limbo for another year or so.
Judge Durke Thompson has several options: Belkin gets his money and is one step closer to separating from a group he’s already been estranged from for years. Or, the seven others can pick an appraiser to evaluate the teams, and, again try to buy Belkin’s share.
Or, Thompson could say the contract was too murky and throw it out. The Spirit then could use a previous buyout agreement included in documents from when they bought the teams from Turner Broadcasting System as their roadmap."
Belkin thinks he's entitled to US$143-million. But Swartz brings up a more legitimate question:
Can either side wait the other out and still pay all the legal fees and retainers...?
Those of us at OSG HQ think Belkin can wait out the other seven. He may not get the US$143-million he thinks he's worth, but he may get a settlement that will cripple an already-hemorrhaging organization.
The losers as always are the fans of this- especially the Thrashers fans who have a franchise that is last in league salary cap figures- approximately US$43.4-million after all the trade dealine fiascos went through. And when Ilya Kovalchuk is traded on draft day, all hell will break loose.
That's just us...
Saturday, February 21, 2009
Day 4: Don't Go Back To Rockville
Hey, it's another day of Kristi E. Swartz from the AJC...
Today's Episode: No, S***, Sherlock!!!
“There’s bad blood between the owners...”
That pearl of wisdom came from Ed Peskowitz during Friday's testimony...
“It was inconceivable to me that Mr. Belkin would object to the appraisal that he paid for,” Peskowitz testified late Thursday. “I was concerned and had the understanding that we would be able to pick the second appraiser. It never occurred to me that both parties would object.”
In his mind, Peskowitz said a fair evaluation would be a low one. He thought they would have the right to object to a high value and then pick the second appraiser.
When Belkin’s attorney Jeffrey Schwaber asked why, Peskowitz grew heated, saying the other owners knew Belkin wanted to buy other professional sports teams. They thought he was “dangling” that in front of CitiGroup Private Bank, the appraiser he had hired, to get the bank to assign a high value to the teams and arena rights.
Belkin, who says he has the right to pick the second appraiser, filed a lawsuit within four hours of receiving CitiGroup’s report. For his part, Belkin justified that action in testimony earlier in the week.
“My understanding is that we asked for the court’s help to stop the defendants from interfering, ” he said. “I didn’t believe anything that the defendants said.”
Once again, we end week one of the anticipated two-week proceeding by repeating an earlier statement...
No s***, Sherlock!!!
Can they all be sent to "timeout" and never asked to return...???
Just axin'...
Today's Episode: No, S***, Sherlock!!!
“There’s bad blood between the owners...”
That pearl of wisdom came from Ed Peskowitz during Friday's testimony...
“It was inconceivable to me that Mr. Belkin would object to the appraisal that he paid for,” Peskowitz testified late Thursday. “I was concerned and had the understanding that we would be able to pick the second appraiser. It never occurred to me that both parties would object.”
In his mind, Peskowitz said a fair evaluation would be a low one. He thought they would have the right to object to a high value and then pick the second appraiser.
When Belkin’s attorney Jeffrey Schwaber asked why, Peskowitz grew heated, saying the other owners knew Belkin wanted to buy other professional sports teams. They thought he was “dangling” that in front of CitiGroup Private Bank, the appraiser he had hired, to get the bank to assign a high value to the teams and arena rights.
Belkin, who says he has the right to pick the second appraiser, filed a lawsuit within four hours of receiving CitiGroup’s report. For his part, Belkin justified that action in testimony earlier in the week.
“My understanding is that we asked for the court’s help to stop the defendants from interfering, ” he said. “I didn’t believe anything that the defendants said.”
Once again, we end week one of the anticipated two-week proceeding by repeating an earlier statement...
No s***, Sherlock!!!
Can they all be sent to "timeout" and never asked to return...???
Just axin'...
Thursday, February 19, 2009
Day 3: Don't Go Back To Rockville
Kristi E. Swartz's yeoman work in Rockville, Maryland continues for the AJC as the Atlanta Spirit LLC continue to piss in each other's bowls of corn flakes.
Today's Episode: "He Tried To Rig The Numbers"
It's the contention of the seven owners today that, through memos and direct conversations with appraisers, Steve Belkin tried to have the CitiGroup appraisal reflect the economic figures he wanted them to reflect.
"An attorney representing the teams’ other owners accused the businessman, Felix Riccio, of interfering with the valuation of the teams and Philips Arena operating rights. Belkin had hired CitiGroup Private Bank to appraise the teams and arena rights in 2005 to determine how much Belkin’s 30 percent stake was worth.
Attorney Jim Shea presented memo after memo to show Riccio, Belkin’s right-hand man, consistently gave CitiGroup information that would influence the determination."
The buyout agreement, from the majority owners point-of-view, was to reflect numbers from August 17, 2005. They contend that Belkin and his representatives continued to send updated figures to CitiGroup after the date.
Swartz continues:
"Riccio said he gave CitiGroup the information to use, “only to the extent that they shed light on the value as of Aug. 17 … if something happened after Aug. 17 it could illuminate the value as of Aug. 17.”
That information included, for example, a letter of intent from the St. Louis Blues hockey team to be sold for $150 million. “That illuminated the value as of Aug. 17,” Riccio said.
Shea also said Riccio gave CitiGroup information on the luxury tax payments for the Hawks, a charge that Riccio denied, saying that the bank spoke with NBA executive and attorney Joel Litvin to get that information.
Shea produced a letter from Litvin to Riccio.
“Please be advised that the NBA has not provided the teams with any estimates on tax and escrow on the ‘05-‘06 season,” the letter said.
Shea pulled out an additional document from Litvin and asked Riccio if he could find 2005-2006 escrow projections. Riccio said it was in a memo but not that one.
Shea pulled out another one.
“Does the memo put the numbers in there?” he asked Riccio.
“It was provided by Mr. Litvin in a separate memo,” Riccio replied after he acknowledged the financial figures weren’t there either."
Riccio also testified the Spirit CFO, Bill Duffy, was concerned about the group's losses saying that the money problems were a "mess" and that they were "going to have to knock on doors to raise money."
Duffy left the group last year...
The final day of Week One is scheduled for tomorrow.
The trial is supposed to last for another week in the Maryland court.
Today's Episode: "He Tried To Rig The Numbers"
It's the contention of the seven owners today that, through memos and direct conversations with appraisers, Steve Belkin tried to have the CitiGroup appraisal reflect the economic figures he wanted them to reflect.
"An attorney representing the teams’ other owners accused the businessman, Felix Riccio, of interfering with the valuation of the teams and Philips Arena operating rights. Belkin had hired CitiGroup Private Bank to appraise the teams and arena rights in 2005 to determine how much Belkin’s 30 percent stake was worth.
Attorney Jim Shea presented memo after memo to show Riccio, Belkin’s right-hand man, consistently gave CitiGroup information that would influence the determination."
The buyout agreement, from the majority owners point-of-view, was to reflect numbers from August 17, 2005. They contend that Belkin and his representatives continued to send updated figures to CitiGroup after the date.
Swartz continues:
"Riccio said he gave CitiGroup the information to use, “only to the extent that they shed light on the value as of Aug. 17 … if something happened after Aug. 17 it could illuminate the value as of Aug. 17.”
That information included, for example, a letter of intent from the St. Louis Blues hockey team to be sold for $150 million. “That illuminated the value as of Aug. 17,” Riccio said.
Shea also said Riccio gave CitiGroup information on the luxury tax payments for the Hawks, a charge that Riccio denied, saying that the bank spoke with NBA executive and attorney Joel Litvin to get that information.
Shea produced a letter from Litvin to Riccio.
“Please be advised that the NBA has not provided the teams with any estimates on tax and escrow on the ‘05-‘06 season,” the letter said.
Shea pulled out an additional document from Litvin and asked Riccio if he could find 2005-2006 escrow projections. Riccio said it was in a memo but not that one.
Shea pulled out another one.
“Does the memo put the numbers in there?” he asked Riccio.
“It was provided by Mr. Litvin in a separate memo,” Riccio replied after he acknowledged the financial figures weren’t there either."
Riccio also testified the Spirit CFO, Bill Duffy, was concerned about the group's losses saying that the money problems were a "mess" and that they were "going to have to knock on doors to raise money."
Duffy left the group last year...
The final day of Week One is scheduled for tomorrow.
The trial is supposed to last for another week in the Maryland court.
Wednesday, February 18, 2009
Don't Go Back To Rockville: Day Two
It only took two days for all the bodies to hit the floor in the Atlanta Spirit, LLC versus itself court case in Maryland.
There was finger-pointing, name-calling, and all that other fun stuff that has made this look more like kids throwing sand in each other's faces rather than adults who claim to care about ownership in sports franchises.
Kristi E. Swartz of the AJC tells us today that Steve Belkin doesn't trust the other owners... and for that revelation, we are all shocked...
"Rob Remar, an attorney representing the seven other partners, asked why Belkin moved so quickly to file a lawsuit, which he did four hours after they received an appraisal from CitiGroup.
“I had objected first, I had become the objecting party. At that time I did not trust any of the actions by any of the defendants,” Belkin said.
So, a phone call was out of the question, Remar asked.
“We wanted to get the help of the court to make sure this valuation process was completed,” Belkin replied.
Remar continued to press Belkin on why he filed a lawsuit.
“You said you wanted to get the help of the court. Did you ever go to the court to say, “Judge can you get us a declaration?”
Belkin deferred that question to his lawyers.
Remar asked the question again.
“My understanding is that we asked for the court’s help to stop the defendants from interfering,” Belkin said. “I didn’t believe anything that the defendants said.”"
Belkin's appraisal of all the property and naming rights is in the neighborhood of US$500-million. The 2005 appraisal came in at US$288.4-million.
Those numbers are why Belkin objected to the appraisals in the first place and filed the lawsuit against his former partners...
More after Day 3 tomorrow...
There was finger-pointing, name-calling, and all that other fun stuff that has made this look more like kids throwing sand in each other's faces rather than adults who claim to care about ownership in sports franchises.
Kristi E. Swartz of the AJC tells us today that Steve Belkin doesn't trust the other owners... and for that revelation, we are all shocked...
"Rob Remar, an attorney representing the seven other partners, asked why Belkin moved so quickly to file a lawsuit, which he did four hours after they received an appraisal from CitiGroup.
“I had objected first, I had become the objecting party. At that time I did not trust any of the actions by any of the defendants,” Belkin said.
So, a phone call was out of the question, Remar asked.
“We wanted to get the help of the court to make sure this valuation process was completed,” Belkin replied.
Remar continued to press Belkin on why he filed a lawsuit.
“You said you wanted to get the help of the court. Did you ever go to the court to say, “Judge can you get us a declaration?”
Belkin deferred that question to his lawyers.
Remar asked the question again.
“My understanding is that we asked for the court’s help to stop the defendants from interfering,” Belkin said. “I didn’t believe anything that the defendants said.”"
Belkin's appraisal of all the property and naming rights is in the neighborhood of US$500-million. The 2005 appraisal came in at US$288.4-million.
Those numbers are why Belkin objected to the appraisals in the first place and filed the lawsuit against his former partners...
More after Day 3 tomorrow...
Tuesday, February 17, 2009
Day One: Atlanta's Spirit Held Hostage
((HT: AJC))
Kristi E. Swartz has been given the prime position of hanging out in Rockville, Maryland for the Atlanta Spirit, LLC self-wimmolation cat fight.
Apparently, after Day One, seven of the eight owners think that Steve Belkin ((pictured, thanks AJC)) is "evil." Or, at least in one memo, Bruce Levinson thinks Belkin fits the description. A lot of people just think the group on the whole fits the bill.
"Rob Remar, the lawyer representing the majority of the ownership group, said Belkin’s lawsuit, which has dragged on for more than three years, is about his desire to “control and dominate” the other owners, who live in Atlanta and Washington. And, it’s about greed, he said, during opening arguments.
The trial is expected to last about two weeks.
Belkin's attorney, Jack Fabiano, argued that his client completed his side of the deal — he let the owners sign Joe Johnson, and he stepped down as NBA governor. So, now, the other partners should pay up — $142.8 million — plus millions in interest.
“We ask the court to give Mr. Belkin what he bargained for,” Fabiano said, saying an appraisal one completed by J.P. Morgan, should be honored. “He was supposed to get a return, and he hasn’t gotten a nickel.”
The case is in Maryland because the owners previously agreed to litigate there. Each side has the right to appeal the judge’s decision, which could drag the already protracted legal process on for another nine months to a year, leaving the ownership of the teams in limbo yet again.
In the long run, the decision could affect whether the group known as the Atlanta Spirit will be able to financially support two professional teams. According to recent court documents, the Spirit has lost more than $174 million since the 2002-03 season, including $50 million in the past two years alone."
Those of us at OSG HQ feel the majority opinion on the group as a whole is the opinion that matters. That all of them need to be dismissed from their duties as governors and owners. They need to go sit in a corner, or go lock themselves in a room. The last man who comes out of the room alive gets nothing.
He's just the last man standing in a protracted legal mess that has killed one franchise, has a 10-year-old building awaiting general maintenance, and a second franchise damn lucky the owners actually care about its well-being.
The fans...???
Ah, screw 'em...
All we can really say to all involved is listen to the words of Michael Stipe and Athens, Georgia band- REM:
Waste another year...
Sunday, February 15, 2009
The Fun Begins Tuesday With Atlanta Spirit, LLC
Everyone heads to court...
Once and for all...??? Doubt it...
((HT: AJC via Howard Bloom))
A court document from Hawks and Thrashers co-owner Steve Belkin probably says it best:
“At this time, the parties dispute all issues in this case.”
Belkin is suing his seven business partners — four who live in Atlanta and three who are in the Washington, D.C., area — over how much his 30 percent stake in the teams and Philips Arena’s operating rights are worth. The owners want to buy out Belkin, who lives in Boston, but the contract that spells out that process is so vague that they haven’t been able to agree on a process or a price.
The dispute will come to a head Tuesday in Montgomery County, Maryland, Circuit Court. It will be up to Judge Durke Thompson to make sense out of the contract and decide whether it’s Belkin or the seven other partners who can select the next appraiser to place a value on the teams and arena operating rights.
The trial, which is expected to last about two weeks, is in Maryland because the owners previously agreed to litigate there. Each side has the right to appeal the judge’s decision, which could drag the already protracted legal process on for another nine months to a year, leaving the ownership of the teams in limbo yet again.
In the long run, the decision could affect whether the group known as the Atlanta Spirit will be able to financially support two professional teams. According to recent court documents, the Spirit has lost more than $174 million since the 2002-03 season, including $50 million in the past two years alone.
Neither the owners nor their attorneys would comment for this story. In the past, the owners have denied that a team would be sold.
But sports business experts say that the viability of the Thrashers is in doubt.
“Maybe we need to revisit these things as to why we put hockey there,” said Bill Sutton, associate department head of the DeVos Sport Business Program at the University of Central Florida, referring to Atlanta and other nontraditional hockey markets.
How it hurts
The uphill battle in Southern markets is not helped by multimillion-dollar ownership feuds.
“The ownership situation is not, you know, the model for running a franchise — to have the owners fighting like that,” said Glenn Wong, an attorney and professor at the University of Massachusetts’ department of sport management.
Sports-business consultants say ownership fights have existed as long as pro sports teams have. That doesn’t mean the issues will automatically spill onto the court or the ice. But the more high-profile the issue, the more owners should worry about fans becoming disenfranchised.
“It can be detrimental if the current ownership discussion becomes so pronounced that it forces the fans to collectively roll their eyes and not want to be engaged in the team,” said David Carter, director of the Sports Business Institute at the University of Southern California. “That’s where the owners would have to take a look at what is the damage done to potential revenue generation as to how this is playing out.”
Each side claims the other owes it millions.
The Atlanta and D.C. owners want Belkin to pay $25.8 million they say he hasn’t paid to cover team expenses since their legal fight began in August 2005, according to a pretrial hearing document, one of few that is publicly available.
For his part, Belkin contends he hasn’t had to pay since the buyout process began, court documents say. He wants the other owners to pay $142.8 million, plus interest as well as legal costs. That’s the amount he says they owe him for his share in the teams based on an appraisal by J.P. Morgan that is now a key part of this trial.
How it all began
The owners bought the teams from the Atlanta-based Turner Broadcasting System in 2004. The honeymoon lasted a couple of months, but soon they were fighting over petty things, such as who would get the best seats at the NBA All-Star Game. The arguments came to a head in 2005 when Belkin, the Spirit’s representative to the NBA, tried to block a trade of then-Phoenix Suns guard Joe Johnson.
The owners eventually signed Johnson, and Belkin agreed to step down as the Hawks’ NBA governor — and to have the others buy out his 30 percent stake. The price was to be set by up to three appraisals, and he was allowed to hire the first one.
Belkin selected CitiGroup Private Bank to determine a price of the teams and arena rights. From the start, the seven owners accused Belkin of trying to “hijack” the appraisal process. But court documents outline interference from both sides.
The seven other owners “began to threaten Citi, both orally and in writing: ‘when Steve is long gone, you will have to live with us and yourself … please remember that …’ ” documents from Belkin’s attorneys said. They also “plotted to get ‘word on the street … that Belkin … is never going to get back into sports,’ and that ‘Belkin will never own another professional sports team,’ ” documents said.
For his part, Belkin hired Game Plan, a Miami Beach-based banking and consulting firm for the sports and entertainment industry, to assist with the process, court documents from the other partners said. Belkin agreed to pay Game Plan more money if CitiGroup’s valuation of the teams “exceeded specific thresholds,” the documents said.
Whichever side objected to CitiGroup’s findings would be able to pick a second appraiser, the contract said. But the contract didn’t say what would happen if both sides objected — which is exactly what happened.
According to court documents, it was clear that both Belkin and the seven other partners planned to object to whatever value CitiGroup assigned the teams. For example, Atlanta-based co-owner Michael Gearon Jr. peppered CitiGroup with phone calls to find out exactly when the appraisal would arrive. He then left two signed objection letters with his attorney before going to Sea Island for the Thanksgiving holiday.
That same morning, Belkin’s business partner began checking his e-mail every 15 seconds for the appraisal and told his assistant to stand by the fax machine with a prepared objection letter in hand.
CitiGroup e-mailed a 69-page valuation, giving the teams and arena rights a fair-market value of US$288.4 million. This meant Belkin’s share was worth about $90 million. Belkin faxed an objection one minute later. The other partners sent in their objection 12 minutes after Belkin had submitted his.
Both sides claimed the right to pick the second appraiser. Belkin argues that the choice is his because he objected first. The others say his argument is wrong, that the process did not involve a “race to object” and that they should be able to pick the next appraiser.
Belkin went ahead and hired J.P. Morgan. It assigned a value higher than CitiGroup, providing Belkin the rationale for his $142.8 million claim. The other owners want that appraisal thrown out.
Tuesday’s trial is the second time the issue has been through the Maryland courts. Previously, a Maryland circuit court judge ruled that Belkin had the right to choose the second appraiser. The judge also ruled that the other owners missed the deadline to pay the price set by his second appraisal, and therefore Belkin was entitled to buy them out at cost.
The appellate court overturned that decision and sent the case back to the lower court, where the process is starting over again.
Once and for all...??? Doubt it...
((HT: AJC via Howard Bloom))
A court document from Hawks and Thrashers co-owner Steve Belkin probably says it best:
“At this time, the parties dispute all issues in this case.”
Belkin is suing his seven business partners — four who live in Atlanta and three who are in the Washington, D.C., area — over how much his 30 percent stake in the teams and Philips Arena’s operating rights are worth. The owners want to buy out Belkin, who lives in Boston, but the contract that spells out that process is so vague that they haven’t been able to agree on a process or a price.
The dispute will come to a head Tuesday in Montgomery County, Maryland, Circuit Court. It will be up to Judge Durke Thompson to make sense out of the contract and decide whether it’s Belkin or the seven other partners who can select the next appraiser to place a value on the teams and arena operating rights.
The trial, which is expected to last about two weeks, is in Maryland because the owners previously agreed to litigate there. Each side has the right to appeal the judge’s decision, which could drag the already protracted legal process on for another nine months to a year, leaving the ownership of the teams in limbo yet again.
In the long run, the decision could affect whether the group known as the Atlanta Spirit will be able to financially support two professional teams. According to recent court documents, the Spirit has lost more than $174 million since the 2002-03 season, including $50 million in the past two years alone.
Neither the owners nor their attorneys would comment for this story. In the past, the owners have denied that a team would be sold.
But sports business experts say that the viability of the Thrashers is in doubt.
“Maybe we need to revisit these things as to why we put hockey there,” said Bill Sutton, associate department head of the DeVos Sport Business Program at the University of Central Florida, referring to Atlanta and other nontraditional hockey markets.
How it hurts
The uphill battle in Southern markets is not helped by multimillion-dollar ownership feuds.
“The ownership situation is not, you know, the model for running a franchise — to have the owners fighting like that,” said Glenn Wong, an attorney and professor at the University of Massachusetts’ department of sport management.
Sports-business consultants say ownership fights have existed as long as pro sports teams have. That doesn’t mean the issues will automatically spill onto the court or the ice. But the more high-profile the issue, the more owners should worry about fans becoming disenfranchised.
“It can be detrimental if the current ownership discussion becomes so pronounced that it forces the fans to collectively roll their eyes and not want to be engaged in the team,” said David Carter, director of the Sports Business Institute at the University of Southern California. “That’s where the owners would have to take a look at what is the damage done to potential revenue generation as to how this is playing out.”
Each side claims the other owes it millions.
The Atlanta and D.C. owners want Belkin to pay $25.8 million they say he hasn’t paid to cover team expenses since their legal fight began in August 2005, according to a pretrial hearing document, one of few that is publicly available.
For his part, Belkin contends he hasn’t had to pay since the buyout process began, court documents say. He wants the other owners to pay $142.8 million, plus interest as well as legal costs. That’s the amount he says they owe him for his share in the teams based on an appraisal by J.P. Morgan that is now a key part of this trial.
How it all began
The owners bought the teams from the Atlanta-based Turner Broadcasting System in 2004. The honeymoon lasted a couple of months, but soon they were fighting over petty things, such as who would get the best seats at the NBA All-Star Game. The arguments came to a head in 2005 when Belkin, the Spirit’s representative to the NBA, tried to block a trade of then-Phoenix Suns guard Joe Johnson.
The owners eventually signed Johnson, and Belkin agreed to step down as the Hawks’ NBA governor — and to have the others buy out his 30 percent stake. The price was to be set by up to three appraisals, and he was allowed to hire the first one.
Belkin selected CitiGroup Private Bank to determine a price of the teams and arena rights. From the start, the seven owners accused Belkin of trying to “hijack” the appraisal process. But court documents outline interference from both sides.
The seven other owners “began to threaten Citi, both orally and in writing: ‘when Steve is long gone, you will have to live with us and yourself … please remember that …’ ” documents from Belkin’s attorneys said. They also “plotted to get ‘word on the street … that Belkin … is never going to get back into sports,’ and that ‘Belkin will never own another professional sports team,’ ” documents said.
For his part, Belkin hired Game Plan, a Miami Beach-based banking and consulting firm for the sports and entertainment industry, to assist with the process, court documents from the other partners said. Belkin agreed to pay Game Plan more money if CitiGroup’s valuation of the teams “exceeded specific thresholds,” the documents said.
Whichever side objected to CitiGroup’s findings would be able to pick a second appraiser, the contract said. But the contract didn’t say what would happen if both sides objected — which is exactly what happened.
According to court documents, it was clear that both Belkin and the seven other partners planned to object to whatever value CitiGroup assigned the teams. For example, Atlanta-based co-owner Michael Gearon Jr. peppered CitiGroup with phone calls to find out exactly when the appraisal would arrive. He then left two signed objection letters with his attorney before going to Sea Island for the Thanksgiving holiday.
That same morning, Belkin’s business partner began checking his e-mail every 15 seconds for the appraisal and told his assistant to stand by the fax machine with a prepared objection letter in hand.
CitiGroup e-mailed a 69-page valuation, giving the teams and arena rights a fair-market value of US$288.4 million. This meant Belkin’s share was worth about $90 million. Belkin faxed an objection one minute later. The other partners sent in their objection 12 minutes after Belkin had submitted his.
Both sides claimed the right to pick the second appraiser. Belkin argues that the choice is his because he objected first. The others say his argument is wrong, that the process did not involve a “race to object” and that they should be able to pick the next appraiser.
Belkin went ahead and hired J.P. Morgan. It assigned a value higher than CitiGroup, providing Belkin the rationale for his $142.8 million claim. The other owners want that appraisal thrown out.
Tuesday’s trial is the second time the issue has been through the Maryland courts. Previously, a Maryland circuit court judge ruled that Belkin had the right to choose the second appraiser. The judge also ruled that the other owners missed the deadline to pay the price set by his second appraisal, and therefore Belkin was entitled to buy them out at cost.
The appellate court overturned that decision and sent the case back to the lower court, where the process is starting over again.
Wednesday, January 28, 2009
A Losing Proposition
This Explains a few things...You kind of have to feel sad for the Atlanta Hawks and Atlanta Thrashers. Apparently, neither team is capable of making their owners some...well any money.
According to the Atlanta Journal-Constituition, the Atlanta Spirit Ownership Group, mentioned many times here on the OSG, have tried in vain to keep the teams afloat despite the fact the teams have lost over $174 Million Dollars since the 2002-03 seasons.
Check out the story...right here Unfortunately this explains several things, like the perennial poor performance of the Thrashers, one of the worst teams in the NHL over the past 6 years. The Hawks have been right there with them, though they have shown signs of life over the past 2 seasons, including this one where they are on a pace to win 50 games.
The fun part of this story is that this report is coming out in advance of what will be a very nasty and very public court case pitting the Atlanta Spirit against a member of their group, Steve Belkin. The case, set to begin February 17th in Montgomery County, Maryland for some strange reason, should be a very surreal and possibly very telling story....Stay Tuned.
((logos courtesy: Atlanta Hawks and Atlanta Thrashers))
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