Eric Williams covered the Sonics' last season in Seattle. A Tacoma native, Eric graduated from Mount Tahoma High and the University of Puget Sound.
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Seeking to protect the league’s interests in Howard Schultz’s bid to regain control of the Seattle SuperSonics, the NBA on Tuesday filed a motion to intervene in the former principal owner’s lawsuit in U.S. Western District Court in Seattle.
Schultz filed suit in April against the Oklahoma City-based ownership group, led by team chairman Clay Bennett, seeking to undo the $350 million sale of the team.
Schultz claims in the lawsuit that Bennett’s group never intended to keep the team in Seattle and cites internal e-mails revealed in litigation between the city of Seattle and the new ownership group as evidence of the intentions of Bennett and his partners.
Schultz’s lawsuit cites breach of contract, fraud and negligent misrepresentation. It seeks to rescind the sale of the team on the grounds that Bennett and his partners did not live up to a “good faith, best efforts” provision in the sale agreement to spend 12 months trying to negotiate a new arena deal in the Seattle area.
Hours before an expected ruling from U.S. District Court Judge Marsha Pechman last week, the city and the Sonics agreed to a settlement that could bring $75 million to the city and allowing Bennett’s group to break its lease with KeyArena and move the team to Oklahoma City.
However, when the city agreed to settle its case against the team, the settlement included no provision to dismiss Schultz’s lawsuit.
Should Schultz continue his court action and win, Wednesday’s settlement goes away and Bennett could be forced to return the team to Seattle, while city would be forced to refund the $45 million payment it received in the settlement.
The two sides in the Schultz suit are scheduled to meet in front of Pechman, the same judge who presided over the KeyArena lease case, at the U.S. federal courthouse in Seattle on Friday.
A motion filed by Ralph Palumbo of the Summit Law Group, a Seattle law firm representing the NBA, claims the Schultz suit skirts the league’s constitution, putting the franchise’s stability at risk.
“These claims for relief are fundamentally inconsistent with the most basic rules and regulations governing the operations of the NBA and its member team, which do not authorize or permit ownership transfers without the express approval of the NBA,” Palumbo states in the filing.
The motion goes on to argue that the Schultz group, operating as Basketball Club of Seattle (BCOS), seeks relief from the Bennett group’s Professional Basketball Club (PBC) that is barred by league bylaws.
“The NBA therefore has a strong and compelling interest in the outcome of this matter and moves to intervene as a matter of right.”
The Schultz lawsuit seeks to put the team in a trust and have it sold to Seattle-based owners. However, according to the league’s filing, the NBA’s constitution states that if a receiver is appointed for a team, the league’s Board of Governors has the right to place the team in the control of NBA commissioner David Stern.
In another motion filed on Tuesday, NBA general counsel Richard Buchanan, requests an oral argument on the matter for Aug. 1. Buchanan states in his filing that according to Article 5 of the NBA constitution “no membership … may be [sold, assigned] or otherwise transferred in whole or in part, directly or indirectly, except in accordance with and subject to the … provisions of this Article 5.”
Buchanan goes on to state that this clause in the league constitution contains several procedures that must be followed in order to transfer the ownership of an NBA team, including an application to the commissioner, detailed information about the proposed transfer and approval by the Board of Governors.
Tim Frank, a spokesperson for the NBA, declined to comment. Richard Yarmuth, an attorney representing Schultz in the lawsuit, also declined to comment.
The Associated Press contributed to this report.
