AHF, if you had to predict...

[ATL_BALLER]

...what will transpire in court on March 7th, what litigation will follow, and finally:

Will Belkin take over?

[exodus]

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...what will transpire in court on March 7th, what litigation will follow, and finally:

Will Belkin take over?

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He answered this in another thread

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Pretty good. The ASG is definitely the underdog on the appeal. There is a real question about whether Belkin wants to own the team, though. He is currently very happy to let the litigation run its slow course and has resisted efforts to speed it up. The only explanation I can come up with for that is financial. That would imply the ASG has a window to negotiate a resolution to the case even if they lose the appeal - although they would certainly pay through the nose if that were the case.

If Belkin wins the legal case, he will be presented with a couple of different options:

(1) Sell to the ASG. This is simple and would certainly involve Belkin exacting a pound of flesh.

(2) Sell to someone else. Belkin would be buying the teams at cost and would realize a huge profit. The NBA would have to approve the sale.

(3) Buy the team and take control; likely selling the Thrashers. This would involve the NBA approving Belkin as the sole owner (and the NHL approving sale of the Thrashers). Belkin would then assume the debts of both franchises (probably defraying some of these costs by selling the Thrashers) and the costs of running the Hawks.

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click

[ATL_BALLER]

Ok, thanks.

[AHF]

That post is essentially my thoughts in response to your question.

I will say that you have to take any predictions on the legal issues with a grain of salt unless someone has read the actual pleadings and is familiar with the case law. The good news for the ASG is that any legal issue is going to be reviewed "de novo" which means that there will not be a presumption that the trial court's ruling was correct. However, I am discouraged by what I have heard in the press regarding the ASG's legal theories because they seem to be largely fairness argument rather than arguments regarding the proper interpretation of the buyout agreement between Belkin and the ASG. Fairness or equity arguments are usually last ditch arguments in contract cases because contracts between consenting parties for the most part don't need to be fair.

The best argument on appeal from my arm chair perspective is the argument that the trial court should not have read a provision into the agreement that the first party to object to the first valuation of the franchises gets to pick the second valuator. The agreement provides that either party may object and gives a time period in which objection can be made. Belkin objected instantly without even reading the report so that he would be the first to object. The ASG also objected within the allotted time but did so after Belkin. The objecting party had the right to pick the second valuator under the terms of the contract. The ambiguity arises when trying to determine what happens when both parties object within the time period under the contract. That scenario does not appear to have been addressed in the contract or contemplated by the parties. The court resolved it by essentially saying "first in time, first in right" so that Belkin had priority by virtue of his being the first to object. It is unclear to me whether there was any legal basis for that decision.

This issue is also important because the reason for the ASG's failure to meet the deadlines to buy out Belkin was the dispute over this provision. The ASG argues that the fact that they were litigating that issue in Court should excuse their non-performance under the contract. If the Court of Appeals rules in favor of Belkin on the issue of who had the priority on picking the valuator, the ASG may be up a creek without a paddle. The arguments about how harsh it would be to allow Belkin to buy the ASG out at cost aren't very persuasive to me. Not having read the briefs, I am not in a great position to give an informed view of the chances on appeal. I also am not real familiar with the Maryland state law rules on contract construction (many states have some default principles on interpreting contracts to resolve ambiguities that would otherwise be too common in contracts).

I would guess the issues the ASG is raising are:

(1) The ASG's timely objection should have had equal weight as Belkin's prior objection;

(2) performance under the agreement was stayed when the parties began litigating the objection provision in court;

and

(3) Belkin's interpretation of the agreement would lead to absurd results that were not contemplated or intended by the parties and such an interpretation should not be given effect.

I would speculatively rate the ASG's odds on prevailing on these arguments in the same order.

[Gray Mule]

[Gray Mule]

And that's the reason they would probably be rejected

as invalid!

Belkin set this entire thing up for failure with the

partnership, IMHO. He allowed the other partners to

paint themselves into a corner, knowing all the time

where this would end.

He wants full control. He wants it all for himself.

He set the trap. The other partners obediently fell

exactly where he intended them to be from the start.

The entire thing has been set up where he wanted it,

in the state he wanted, the court he wanted and under

the people he wanted to hear it with him and his very

sharp law team to handle everything.

And representing the rest of the partnership? I don't

know, but I do know, they must be very good and know

how to handle / work this entire thing or they are

dead.

Weird stuff, to say the least.

[DrReality]

ASG were the sheep and Belkin the wolf. I agree that he saw the whole thing coming. Candy from babes.

[AHF]

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in the state he wanted, the court he wanted and under

the people he wanted to hear it with him and his very

sharp law team to handle everything.

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In fairness, I am sure he would rather have the case in court in Boston than in Maryland. Maryland is more the home base of the Levenson portion of the ownership group and is more neutral ground for the case in terms of forum. There is almost surely a forum selection clause in the contract that all the parties agreed to that stated that any litigation on the buyout would happen in Maryland. I wouldn't put this as Belkin pulling the wool over the ASG's eyes in terms of what court they are in and what judge heard the case.

[Packfill]

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And that's the reason they would probably be rejected

as invalid!

Belkin set this entire thing up for failure with the

partnership, IMHO. He allowed the other partners to

paint themselves into a corner, knowing all the time

where this would end.

He wants full control. He wants it all for himself.

He set the trap. The other partners obediently fell

exactly where he intended them to be from the start.

The entire thing has been set up where he wanted it,

in the state he wanted, the court he wanted and under

the people he wanted to hear it with him and his very

sharp law team to handle everything.

And representing the rest of the partnership? I don't

know, but I do know, they must be very good and know

how to handle / work this entire thing or they are

dead.

Weird stuff, to say the least.

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Greymule, the problem is that the courts will not be sympathetic to a bunch of rich guys who were outsmarted by another rich guy. Both sides are sophisticated parties with expensive legal teams on their sides. Being dump or hiring bad attorneys is not grounds to obviate the terms of the agreement. Courts will always look first to the actual words of the agreement (i.e., what lies within the "four corners" of the document) before considering course of dealing and other interpretitive issues.

ASG screwed themselves. Sad but true.

The ultimate reality is the best case scenario is that neither the ASG or Belkin ends up with control of the franchise when the dust settles. Hopefully one side wins and the other can't afford to maintain control so has to sell a controlling interest to an owner with half a brain.