McDavid is sueing Time Warner over reneg of deal

[Admin]

ATLANTA -- A Dallas auto dealer who lost his bid to buy the Atlanta Hawks and Atlanta Thrashers on Monday sued the struggling franchises' former parent company, Time Warner Inc., and accused the media conglomerate of reneging on the deal.

David McDavid also alleges in the lawsuit in Fulton County Superior Court that Time Warner and subsidiary Turner Broadcasting System Inc. revealed his confidential business plans to a competing group of investors who ultimately bought basketball's Hawks and hockey's Thrashers for $250 million.

McDavid wants Time Warner and TBS to pay him the difference between the price the teams were bought for, which is similar to what he had agreed to pay, and what the teams are actually worth, which some believe is much more.

"We believe we would have had instant equity," said McDavid's attorney, Jason Freier.

The suit does not specify an amount, but Freier said damages are in the hundreds of millions. Analysts had said before the deal that the Hawks, Thrashers and baseball's Atlanta Braves, also owned by Time Warner, together were worth about $750 million.

Turner spokeswoman Shirley Powell declined to comment, saying the company and its lawyers hadn't reviewed the lawsuit yet.

Time Warner's sale of the two teams and operating rights to Philips Arena to Atlanta Spirit LLC to help pay off the company's heavy debt was completed in March 2004.

The nine-person ownership group of investors from Atlanta, Boston and Washington includes Steve Belkin, founder and chairman of the Boston-based marketing and investing company Trans National Group, and Beau Turner, the youngest son of Turner founder Ted Turner.

The elder Turner previously owned the teams and baseball's Braves but lost control through a series of corporate mergers.

McDavid began exclusive talks to buy the teams in April 2003. With McDavid still believing his offer would work out, Time Warner suddenly changed course a few months later.

In the lawsuit, McDavid said that his deal to buy the teams was ratified by Time Warner's board. He said that upon gaining access to his confidential business plans and financial models, Time Warner reneged and sold the teams to Atlanta Spirit.

The lawsuit accuses Time Warner and Turner of breach of contract, fraud and misappropriation of trade secrets, among other things.

Freier said consultants McDavid hired during the negotiation process believed the teams and Philips Arena were worth hundreds of millions of dollars more than what McDavid had contracted to pay for the teams. Freier declined to be more specific.

In connection with the sale, Turner Broadcasting said it would retain 15 percent ownership of Atlanta Spirit, but would have no say in operations.

Time Warner has since stopped trying to sell its baseball team, the Atlanta Braves.

[sick_five]

Can't say that I blame him.

[Boondocks]

I dunno, isn't it rather late to start sueing? Ownership changed hands quite some time ago and sueing at this stage looks to me like resentment and trying to get payback instead of actual grief and sueing to get what’s owed to you..right?

[Diesel]

He didn't have the money... He must be seeking an out of court settlement. I would take him to court and make sure he didn't get 1 nickle...

[Lascar78]

I think he announced that he'd be suing right after it happenned. It's probably just taken his lawyers this long to get everything together.