A bankruptcy trustee who controls 7 percent of the Sacramento Kings says the team’s limited partners are being denied their legal right to match a Seattle investment group’s purchase offer for the team…
[David] Flemmer, the court-appointed trustee overseeing the 7 percent share of the Kings owned by team limited partner Bob Cook, said Cook and other minority owners have “first right of refusal” to buy the club. He said that right is guaranteed in the partnership agreements governing ownership of the team.
That means the limited partners should be allowed to match the deal that the majority owners, the Maloofs, have struck with the group headed by hedge fund manager Chris Hansen.
This is all extremely confusing and gets into contract law which is not my forte, but as I understand it: The minority Kings owners have as part of their purchase agreement a right to be offered a chance to buy more shares of the team before it’s sold off to someone else. One minority owner, Bob Cook, has filed for personal bankruptcy, so the trustee representing his shares is complaining that skipping over this first-refusal bit will make his shares worth less, potentially. And so the trustee is threatening to take this all the bankruptcy court next Thursday, where he’ll demand something, though it’s not exactly clear what yet.
Really, the only thing we know for sure at this point is that involving bankruptcy court in any way is almost certainly going to create a sizable mess, as we saw with the Phoenix Coyotes‘ trip through bankruptcy a couple of years back. This whole thing seems ripe for an out-of-court settlement — it’s not like a guy who’s bankrupt is going to offer to spend $340 million to buy a majority share of the team anyway, though given that Cook is apparently trying to get Oracle CEO Larry Ellison interested in joining the Sacramento effort to keep the team, maybe he’d somehow try to act as a pass-through for Ellison’s money? Add in that the NBA gets to approve or disapprove any sale of the team, and there are all sorts of scenarios involving rocks and hard places, all of which mean that we could be a lot further from resolving the Kings situation than it looked a few days ago.
But anyway, Pearl Jam, Soundgarden, and Death Cab for Cutie want the Seattle arena built, and that’s what’s truly important, right? Because, um, Soundgarden somehow thinks it’s going to be popular enough to play arena shows again, and would like snazzier dressing rooms? Or maybe they just think that it’ll be cool to play at a half-empty Key Arena once there’s nothing else going on there.