LOS ANGELES — The latest round in the contentious legal wrangling over ownership of the Los Angeles Clippers is scheduled for Wednesday, when Shelly Sterling’s lawyers plan to go to court to ask a judge to sign off on her takeover of a family trust, an action she used to clear the way for her sale of the NBA franchise.
Sterling late last month completed a whirlwind sale of the team that she and her husband, Donald, co-owned for more than three decades. Shelly Sterling said it was her right to sell the team because brain scans and visits with two neurologists showed that Donald Sterling was no longer mentally competent to manage his affairs.
She had declared on May 29 that terms of the family trust allowed her to become sole trustee. That was the same day she announced that former Microsoft Chief Executive Steve Ballmer had prevailed in the bidding to buy the Clippers.
But Donald Sterling, 80, has contested both the sale of the team, for a record $2 billion, and the claim that he had lost mental capacity and could not manage his team and business empire. His lawyer, Max Blecher, called that contention “ridiculous.”
Shelly Sterling’s lawyers have now advised Blecher that they intend to go to Los Angeles County Superior Court on Wednesday to ask for a judge’s stamp of approval on her solo control of the family trust.
“The understanding we have is that she is going to go in and say that he has cognitive impairment that has prevented him from making decisions,” said Blecher, one of several lawyers who has represented Donald Sterling. “And that is something we will oppose.”
It is unclear whether Wednesday’s downtown hearing will be held in open court or a judge’s chambers.
Rather than ask for an immediate ruling, Shelly Sterling is expected to ask a probate judge for an expedited hearing on her husband’s mental competency. “We will tell the judge that we just got these papers and need more time to look at it,” Blecher said.
Wednesday’s hearing is distinct from the legal challenge Donald Sterling previously filed against the NBA and Commissioner Adam Silver. That lawsuit asks for $1 billion in damages and claims that the league and Silver stripped Sterling of his rights — fining him $2.5 million and banning him from the league for life — without a fair hearing.
Sterling issued a statement Monday saying he intended to press ahead with those claims. But legal analysts have said the litigation against the NBA puts Sterling in a bind because his wife agreed to indemnify the league against any legal actions. If the NBA is forced to pay, the indemnification means the league can recover the proceeds from the Sterling family trust. Sterling would effectively be paying damages to himself.
The various court actions are part of a topsy-turvy saga that began April 25 with the release of Sterling’s recorded rant against African-Americans. The struggle appeared as if it might be at an end a week ago, when Sterling said he would let the sale to Ballmer go through. But the 33-year owner of the Clippers reversed himself when he learned that the NBA would not rescind the fine and lifetime ban.
5 things to know about the Sterling trial
As he threatened, Donald Sterling is not giving up the Los Angeles Clippers without a fight.
The embattled owner said this week that he is going ahead with a $1 billion lawsuit that claims the NBA violated his rights by banning him from the league and trying to take his team away. Instead of a quick resolution to the sordid saga, which started when Sterling’s mistress recorded him making racist remarks, the league now faces the prospect of months — or longer — in court.
Here are five ways the dispute could be resolved now that Sterling’s lawsuit against his fellow NBA owners is back on:
NEGOTIATION: The league could hammer out a deal with Sterling to get him to drop the lawsuit and let the $2 billion sale to former Microsoft CEO Steve Ballmer proceed. What would persuade the notoriously litigious Clippers owner to go quietly? The NBA could back down on the $2.5 million fine levied against him by commissioner Adam Silver. But it’s doubtful Sterling is jeopardizing a $2 billion deal over a relative pittance.
More likely, the league’s longest-tenured owner wants to maintain some association with the Association. Would the NBA be willing to let him attend team functions, retain courtside seats or serve on the board of the planned charitable foundation after some sort of sensitivity training? Perhaps, if that’s what it takes to make this all go away.
BANISHMENT: Sterling’s temporary acquiescence to the sale may have been a legal rope-a-dope to lull the NBA into canceling the meeting at which it was virtually certain he would have been voted out of the league. Now that the sale is on hold, the league could reschedule the hearing — if for no other reason than to pressure Sterling into a settlement. If he doesn’t, the owners vote, the league seizes control of the team and sells it to Ballmer or re-opens the bidding.
BUYER’S REMORSE: Ballmer’s bid of $2 billion was almost four times the record for an NBA team, and 3.5 times the value placed on Los Angeles’ second-most illustrious NBA franchise by Forbes Magazine earlier this year. He won the auction in a crowded field of celebrity bidders that included Oprah Winfrey, entertainment mogul David Geffen and some of Los Angeles’ richest men and women.
But if Ballmer was hoping for a smooth transition, the potentially long delay could give him time to rethink his purchase. The Clippers have never been as hot a property as they were during the frenzied sale process, and Ballmer overbid the next-highest offer by $400 million. If Shelly Sterling can’t deliver the team, it could give Ballmer a chance to back out or renegotiate.
LITIGATION: The lawsuit proceeds, and a California jury decides whether the league violated Sterling’s rights by stripping him of his team based on a private conversation with his girlfriend. Or the NBA fights to have the case moved to New York. Or Shelly Sterling gets a probate court to affirm her right to sell the team. Or Ballmer sues DonaldSterling for interfering with his deal.
The winners in this scenario are the lawyers, with a twist: the league constitution says Sterling pays the NBA’s legal fees unless he wins on every single claim against him. And even if he does, he is essentially winning a judgment against himself: Shelly Sterling has agreed to indemnify the NBA against all lawsuits, including by her husband.
VINDICATION: Sterling wins in court and keeps the team. His lifetime ban is overturned. Maybe he even gets to keep his $2.5 million fine. And then the appeals. And the player boycotts. And sponsors flee. And the Clippers once again become the laughingstock of the league they were for so much of Sterling’s tenure as owner.