The Famous Sonics Side-letter

[Kerry]

I just read the famous side letter Schultz is suing on and I can tell you no way in hell he wins his lawsuit. It is actully laughable for Schultz to even attempt something so crazy.

Here is the link to the letter.
Sonics | Howard Schultz suit adds fuel to e-mail fire | Seattle Times Newspaper

[kevinpate]

From the article

"We seek to have the court unwind the sale by imposing a constructive trust on the team and giving [Basketball Club of Seattle] the right to try and resell the team to a buyer that, in fact, would keep the Sonics in Seattle," Schultz wrote. "We do not ask the court to return the team to BCOS or in any way obligate any BCOS member to participate in repurchasing the Sonics.

Make them sell it to a local, not me, I want my money, I done got my sweet flip, but make them sell it so folks wills tart buying my coffee again. pretty please.
Sheeeeesh

[Kerry]

If you want to have a good laugh read Schultz's letter to his ownership group. What a piece of work that guy is. He doesn't even want the team back. He just wants to sell it to Ballmer so he can get more money.

[betts]

The ridiculous thing is that the "sweet flip" e-mail implies that if an arena were obtained, the owners would sell the team, and work on getting a team for Oklahoma City. In no way does that imply that the team would be leaving Seattle, and it's going to be hard to argue that Schultz was committed to only having the Sonics owned by Bennett and company.

[Kerry]

My favorite part is that Schultz is filling the lawsuit through another company that wasn't even a party to the ownership of the Sonics. Talk about despiration. I also love that he included the fact that trying to get majority support from the original owners would not be possible. What an admission to put in the lawsuit. Couple that with his statement the company that owned the Sonics ceased operations shortly after the sale leads me to believe they have got nothing! The offended party doesn't even exist any more.

[SouthsideSooner]

Wow....so we finally see the infamous side letter. Could it have possibly been written more vague?

Between the side letter and the "sweet flip" email, this lawsuit is beyond stupid.

[OKCMallen]

Amazing. Their evidence showed a COMMITMENT to keep the team in Seattle if an arena deal was made. Clay was not under contract to OWN the team if an arena deal was reached. Just to make a good faith effort. I think I am going to send Clay a check for $50 to hepl defray some of these legal costs.

[MikeLucky]

Maybe I'm stupid..... but this suit seems to aimed at Clay's intent to move the team, and alleging that because his intent was to move it is fraud.... but isn't his "intent" irrelevant???? I mean it doesn't matter what his intent was as long as he satisfied the "good-faith" effort to keep the team there.

I just don't see how this case will have any legs, but then again, I'm not an attorney.....

[OKCMallen]

Well, I am an attorney, and I don't see how it will either, Wichita. The complaint contradicts itself...it talks about him selling the team in a "sweet flip" if an arena deal was reached...meaning he would keep the team in Seattle. Good faith effort has nothing to do with "intent" as far as I know. Good faith effort was given and is proveable. The complaint uses that email as evidence to never keep the team in Seattle, but clearly that email states that he will if he has to do so (i.e.- to meet contractual obligations).

[Decious]

I'm not a lawyer, but I don't see any evidence of fraud. I see emails that reveal evidence of Bennett wanting a team for OKC. Duh... He tried to buy the Hornets to keep them in OKC. Howard knew that Bennett wanted a team for OKC. He simply thought that the prospect of a relocation would prompt action from the Seattle area to produce an arena solution and he wanted to cash out and turn a profit. How then can he be upset with Bennett for wanting to cash out and turn a profit if a facility had been built in Seattle.

This should be thrown out.

[MikeLucky]

Well, I am an attorney, and I don't see how it will either, Wichita. The complaint contradicts itself...it talks about him selling the team in a "sweet flip" if an arena deal was reached...meaning he would keep the team in Seattle. Good faith effort has nothing to do with "intent" as far as I know. Good faith effort was given and is proveable. The complaint uses that email as evidence to never keep the team in Seattle, but clearly that email states that he will if he has to do so (i.e.- to meet contractual obligations).

There has to be some precedence regarding professional sports locales with deference towards "good-faith" efforts.... and my guess is that all the steps that Clay and PBC took during that year (hiring an architect, soliciting lobbyists, etc.) are probably in line with what would constitute a LEGAL good-faith effort.

I mean that's how I would have done it, but I'm just an average joe......

[Kerry]

I don't understand how a company can file a lawsuit on behalf of an ownership that doesn't even exist anymore when a majority of people involved in the orignal ownership group are not supportive of the effort - as mentioned in the lawsuit!

I think I will suing Boeing on behalf of Pan Am airlines because at one time I owned stock in Pan Am.

[Blazerfan11]

Where are all the juicy quotes Schwartz made about how the team was going to move to OKC if the city didn't foot the bill for some of the new stadium? I remember seeing reference to it in either a nyt article or a wsj article, not sure which....

[Laramie]

Schultz had to go through with this suit. He himself is hoping that it gets thrown out; then, he can save face. Ballmer is footing the bill on this one.

It has been no secret that the OKC investment group was going to move the team if an arena deal wasn't struck, they knew that they couldn't continue to foot loses just to keep the team in Seattle--wasn't that why Howard sold the team.

Schultz knew himself that there would be backlash from this sale.

[Blazerfan11]

interesting, laramie!

[OKCMallen]

The one bad thing that comes form this: if the judge buys into any of this, which he shouldn't, there is precedence to keep teams from moving by using a preliminary injunction. Happened to the Twins a while back.

[betts]

The one bad thing that comes form this: if the judge buys into any of this, which he shouldn't, there is precedence to keep teams from moving by using a preliminary injunction. Happened to the Twins a while back.

Actually, the injunction in Minneapolis was designed to keep the team from disappearing altogether. The league was planning to contract, and the Twins were going to be winkled out of existence. I don't know if the precedent in Minneapolis would apply to this situation.

Also, not being a lawyer here, I have a question. If Bennett is the owner by law, were Schultz to win his lawsuit, Bennett could still appeal. Would Bennett not still be considered the owner, pending resolution of the lawsuit? The only reason I ask this is because of the Atlanta Hawks situation. A single owner was ejected fromt he Hawks ownership group, sued and was awarded ownership of the team. The other owners immediately appealed, but pending resolution of the lawsuit, the other owners are running the team.

So, would an injunction by Schultz be feasible, considering the contract in Oklahoma City and the fact that Bennett is still the legal owner?

These might be stupid questions, but I have no legal knowledge.

[BDP]

Yeah, worst case from this is that it delays a move even in light of a settlement on the lease.

[OKCMallen]

Betts, I'm pretty sure the case I am remembering had to do with the Twins playing elsewhere, not being disintegrated...but I could be wrong. Been a year since I had the class.

As to the other question, I really don't know. That's a pretty technical question that is WAY beyond my knowledge.

I will say this though, one of the big factors in granting a preliminary injunction is the judge's opinion of the chances of the movant's final success on the merits. Translation: if the judge buys into this crap and grants an injunction, the judge thinks Shultz is MORE likely to win than not! So, we'll have a good gauge of what's going on when/if the judge rules on a motion for injunction.

[betts]

"The primary road block to eliminating the Twins was their lease at the Metrodome, extended by the team in September through the 2002 season.

The Metropolitan Sports Facilities Commission, which operates the Metrodome, sued to force the Twins to honor their lease, and Hennepin County District Judge Harry Seymour Crump issued the injunction on Nov. 16. The Minnesota Court of Appeals upheld the order Jan. 22 in a 3-0 vote."

ESPN.com: MLB - Baseball postpones contraction until 2003

I'm from Minnesota, and a Twins fans, which is why I was pretty sure about this.

[mmonroe]

My favorite part, it says they will continue to keep the team there so long as they can secure a new arena, and "over the next year".

[betts]

My favorite part, it says they will continue to keep the team there so long as they can secure a new arena, and "over the next year".

And, the letter was dated July 18, 2006. I think the fact that Bennett gave them until Oct. 31st, 2007 was generous on his part, and above and beyond the call, since the letter doesn't give the Oct. 31st date, merely a one year effort.

[betts]

I think it's interesting that, in the lawsuit, Schultz' lawyer (deliberately I would assume) leaves out half the sentence in the side letter.

The suit writes: 'The Oklahoma City group told BCOS at the time it purchased the team that "...it is our desire to have the Sonics and the Storm continue their existence in the Greater Seattle Area and it is not our intention to move or relocate the team."' They end this sentence with a period, using quotations, when in reality, that phrase didn't end and follows:

.....so long, of course, as we are able to negotiate an attractive successor venue and lease arrangement."

I would call that a sin of omission, if not an outright lie.

[solitude]

I think it's interesting that, in the lawsuit, Schultz' lawyer (deliberately I would assume) leaves out half the sentence in the side letter.

The suit writes: 'The Oklahoma City group told BCOS at the time it purchased the team that "...it is our desire to have the Sonics and the Storm continue their existence in the Greater Seattle Area and it is not our intention to move or relocate the team."' They end this sentence with a period, using quotations, when in reality, that phrase didn't end and follows:

.....so long, of course, as we are able to negotiate an attractive successor venue and lease arrangement."

I would call that a sin of omission, if not an outright lie.

That's a very good point, betts.

Kinda like turning, "I want to beat my wife over the head until she gives in and lets me buy her that new car she wants so bad for her birthday. She just doesn't want me to spend the money," into "Look! The woman is in danger of domestic violence! The husband himself wrote, 'I want to beat my wife.'"

[Kerry]

If Schultz tries to turn around Starbucks the way he is trying to save the Sonics then sell your Starbucks stock now.