More News on Sonics Lawsuit

[Nathaniele]

Sorry if I am double posting, I am a new user (gold) and never saw my posts reply on another thread, thought I would try posting a new one to see if its now showing.

Anyhow a lot of breaking news on the Sonics lawsuit on espn today/tonight

ESPN - E-mails key in Schultz's suit to reverse Sonics sale - NBA

A question & answer session posted with a legal expert from ESPN, just a couple of the questions here (please see link for all of them)

Q: Schultz has been reviled in Seattle since he sold the team. Isn't this just a public relations stunt to allow Schultz to improve his public image?

A: The lawsuit is more than a public relations stunt. The allegations against Bennett and his group are serious and seem to indicate a fraud at the time of the sale. The chronology of the e-mails is compelling evidence that will allow Schultz to push Bennett and his group into a bad corner. If it were a PR stunt, both Schultz and Yarmuth would be holding press conferences and making dramatic statements. Neither would comment to ESPN.com beyond what is said in the lawsuit. The language of the suit is lean and spare. If anything, it understates the case. Their conduct and their lawsuit are clear indications they are serious about their allegations and their attempt to undo the sale.

Q: How does Schultz's suit relate to the city of Seattle's lawsuit to bind Bennett to the KeyArena lease, which is scheduled to go to trial June 16?

A: Both lawsuits are in the same courthouse and could easily end up before the same judge. The lease litigation led to the discovery of the damning e-mails that are the basis for Schultz's case. The cases, added together, present Bennett with serious problems. Both jeopardize his bid to move the team to Oklahoma City. If he loses the lease case, he can still try to buy his way out of the lease by increasing his offer beyond the $26 million bid that the city rejected. If he offered $50 million or a bit more, the city would likely be obligated to give it serious consideration. Even if the city were to reach a buyout agreement with Bennett before the six-day trial begins in June, the Sonics owner will still need to deal with Schultz's suit. If Bennett loses the Schultz case, he loses the franchise.

If either suit is successful in postponing the Sonics' move beyond the start of the 2008-09 season, according to the NBA Constitution, Bennett's group will need to reapply for relocation before the NBA Board of Governors.

Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.

Munson also gave the Seattle a 55 to 60 % chance of winning this suit and keeping the sonics in ESPN chat.



And the newest article posted a couple hours ago on ESPN, this is only some of the article, please see the link right below for the full article.
ESPN - Newly revealed e-mails could cause headaches for Sonics owner - NBA

A filing by the city of Seattle this week in federal court in New York includes e-mails to and from Bennett that show the NBA was concerned last summer that Sonics owners may be breaching their contractual promise of good-faith efforts to find a new arena in Seattle.

In court documents provided Thursday by attorneys representing the city, Bennett stated in an e-mail to Sonics co-owner Aubrey McClendon last Aug. 13 that the NBA was looking into issues "relative to certain documents that we signed at closing that may have been breached."

Bennett wrote that president of league and basketball operations Joel Litvin was looking into the possible breach.

Earlier that day, Bennett had written an e-mail to McClendon referring to the fallout from McClendon's comments to an Oklahoma business publication that "we didn't buy the team to keep it in Seattle, we hoped to come here."

"Yes sir we get killed on this one," Bennett wrote to McClendon. "I don't mind the PR ugliness [pretty used to it], but I am concerned from a legal standpoint that your statement could perhaps undermine our basic premise of 'good faith best efforts.'"

NBA commissioner David Stern fined McClendon $250,000 for his comment. The city is citing it as evidence Sonics owners lied to Seattle when asserting they weren't trying to move the team.

[solitude]

I've been saying this is serious. ESPN Radio on Wednesday said they had three legal experts who specialize in contract law look at all the known public facts. All three said that Bennett was in big trouble and could lose the franchise. Exactly the same as this Munson guy from Chicago wrote. Clearly, the email from Clay Bennett to McClendon shows he was concerned with the legal ramifications from McClendon's comments alone. God forbid did he ever dream the e-mails on top of AM's comment would become part of discovery in a legal suit. No, this doesn't look good and this is serious.

[Nathaniele]

Seriously, what were they thinking? Why in the world would they put this all in email????? If they had just spoken on the phone, none of this would be happening.

[Nathaniele]

I found a link on the Seattle site of the ESPN legal expert Munson giving Seattle a 55 to 60% chance of keeping the Sonics on radio here

950 KJR - Seattle's ONLY All Sports Station

Even Muson (the espn legal guy) is saying that the OKC owners have to be wishing they never knew what email was, and how its really killing them.

Schultz hired a firm that is not in the business of losing. Richard Yarmuth is one of the hardest hitting attorneys in the nation and they are finding evidence against Bennett by the hour. Yarmuth stopped the Seattle Mariners from being moved otu of Seattle, this is not new to him, he is batting 1000 when it comes to stopping teams from being moved. If they get their injunction and the team is FORCED to stay in Seattle during the trial, chances are Seattle is going to keep them. Schultz is investing lots of money into this case and has deep pockets and is determined to clean up his image in Seattle as he has taken a huge hit with the public in Seattle.

Some info on their Legal Team

Antitrust. Has litigated antitrust suits, both as counsel for plaintiffs and defendants, involving the motion picture industry, timber industry (including a successful 6-month trial in federal court), cattle industry, mint industry and others.

General Litigation. Cases include the defense of fraud claims in the sale of Kentucky Derby winner Real Quiet; defense of charitable foundation in challenge to testamentary capacity of major donor; representation of King County in litigation against the Seattle Mariners, to prevent then owner George Argyros from moving the team from Seattle; defense of several Seattle law firms as their counsel in cases where they were sued; representation of Weyerhauser Real Estate Company in several protracted lawsuits involving its development at Snoqualmie Ridge.

[betts]

I'm not a lawyer, but I have spoken to several who say fraud is difficult to prove. I would think that to do something as serious as remove a team, you would have to prove fraud beyond a reasonable doubt.

There are a couple of things that come to mind. The contract between Bennett and Schultz also tacitly includes the NBA as a partner, because the sale to Bennett and any possible move could only happen with the consent of the NBA. Regardless of any intent or hope to move the team on the part of the owners, it was clear there was no hope or intent on the part of the NBA. There had to be a failure on the part of Seattle to live up to the second half of the following sentence for the NBA to allow a move: "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, so long, of course, as we are able to negotiate an attractive successor venue and lease arrangement."

I do think it is interesting that, in their lawsuit, Schultz' lawyers completely left out the highlighted part of the above sentence. Was there concern on their part that it was prejudicial to their case? It is the key part of the agreement with Schultz. The first half of the sentence has a completely different meaning if you leave out the second half. The "intent" of the ownership group can only be understood if the sentence is whole.

I can understand, if an arena was built and Bennett still tried to move the team, that fraud could be claimed. But, since the second half of the above sentence was never fulfilled, there is no concrete evidence to prove that fraud absolutely existed. It will come down to actions versus e-mails, and there are conflicting e-mails. Ward's e-mail about possibly selling the team if an arena was built, the "sweet flip" e-mail, the e-mail in July of 2007 about discussing an arena with Sabey.....all of those directly contradict the fact that there was intent to defraud at the time of purchase.

There may be other e-mails that contradict intent to defraud as well. Obviously, the lawyers used the ones that were most prejudicial in their lawsuit, and the ones designed for maximum effect in the press.

The bottom line, however, is that the NBA would never have allowed a move if an arena had been built, and so any actions that would allow the group to defraud Seattle would not have been approved. There was a built in fail-safe for Seattle in the sale.

[mmonroe]

On the nose Betts

[Nathaniele]

Did you listen to the interview with Munson from the radio broadcast I posted? Munson goes into a lot more details in the interview. At one point saying when he first heard of the lawsuit he gave it 0% chance and thought it was just nothing more than grandstanding. However after having read it, he was shocked at how strong the lawsuit actually is and actually gives Seattle better odds of winning than Bennett. He also gives more details on the actual lawsuit and thinks Seattle has a really strong case.

I have read that more emails are going to be released and Munson talks about reading them (ones that are not yet released) and says its all rather damning. Mention that one email talks about Bennett's intention to move the Team to OKC two days before actually buying the team! He also talks about how the Arena deal was basically overblown on purpose to ensure a failed deal, that we are going to be seeing a lot more coming out over the next couple weeks.

Can anyone please explain how Bennett and company were dumb enough to type all this out in emails? Why on earth would you ever commit to writing two days before buying the team that you intended to move them? Why oh why?

When asked to give a % of the case for Seattle, again he said he gives it a 55% to 60% chance in favor of Seattle, that Bennett would make a profit that the team would be sold for higher value than what he had paid.

[betts]

He also talks about how the Arena deal was basically overblown on purpose to ensure a failed deal, that we are going to be seeing a lot more coming out over the next couple weeks.

I did not hear this in his statement. And again, unless there is specific evidence of this, all the arena data around supports that price. If Bennett truly has information that the mayor knew the Key Arena remodel was going to cost more than $300 million, that is supportive as well.

[OKCMallen]

He also talks about how the Arena deal was basically overblown on purpose to ensure a failed deal

This is the only statement that, if true, would indicate a lack of bad faith. Everyone's freaking out for some reason, when the BEST most SHOCKING statement they have it a half-truth. Come on guys, let's not hit the panic button yet.

[MikeLucky]

This is the only statement that, if true, would indicate a lack of bad faith. Everyone's freaking out for some reason, when the BEST most SHOCKING statement they have it a half-truth. Come on guys, let's not hit the panic button yet.

Exactly.... all they have half-proven at this point is intent, which does not even speak to fraud or a lack of a good-faith effort.

Before this all came out Slade Gorton was the Seattle SUPERHERO that would save this whole situation. But, like someone posted above, even he has seen the evidence (probably more than the public has seen) and yet he is ready to talk settlement.....

Unless there is something more damning yet to come out, I think the Seattleites are getting set up again for disappointment....

[betts]

I cannot find the link. I guess we will have to see what the e-mails say. What I wonder is why Slade Gorton, just a couple of days before Schultz filed his lawsuit, said he was willing to talk to the NBA about an expansion team because he was quite sure the Sonics were moving. He'd seen all the e-mails. If he thought they were so damning, I'm not sure why he would have said that.

However, if there are truly e-mails stating that the arena deal was overblown on purpose, that would be a massive problem. It would also be stupid, since the Orlando arena will cost at least $450 million, the Muckleshoot estimate was over $400 million, the Brooklyn arena is over $600 million as well. There's no reason to think a new arena in Seattle wouldn't have cost that much.

[Nathaniele]

The radio interview with Munson (espn top legal guy)

950 KJR - Seattle's ONLY All Sports Station

On the right side

Softy | 10 am - 1 pm
Dick Baird 4-24 - 04/24
Lester Munson 4-24 - 04/24

Click the "Lester Munson 4-24 link to listen

[Kerry]

Why doesn't Bennett just agree to play in Seattle through 2010 and the City's lawsuit goes away. Then they only have to deal with Schultz who by the way, already said they exhusted all efforts to find a local buyer.

[betts]

I Schultz does get an injunction, as is speculated, then they should drop the lawsuit. Because if so, it's virtually impossible for the team to play in OKC in 2008/9. They might as well save some money.

[Nathaniele]

Betts

Read the lawsuit, I might be confusing the text of the lawsuit with what he said on that point, it was said or written something about not so much the price I think as the fact that the deal was made under circumstances that were meant to fail, something about delivering it at bad time, right before the house was going to retire for some period of time, thus ensuring it would get no kind of time to be looked at, let alone considered, etc.

[betts]

I read it. That's the same bs posted on the Seattle forums. First of all, the legislature knew an arena was going to be presented to them as early as July the year before when Bennett announced he would need a new arena to keep the team in Seattle. The city of Seattle could have come up with it's own arena proposal, as could the legislature have done. Look what Mick Cornett did in OKC. He had an arena plan drawn up, presented it to the Sonics' owners and got NBA approval. Bennett didn't have to come to him.

Nickels just kept talking about the Key Arena, when the side letter clearly stated that the Key Arena was not an acceptable venue. If Schultz wants to hold Bennett to the side letter, he will have to admit that it clearly stated the Key was not an option.

Secondly, Bennett presented his proposal in February, and the legislature didn't adjourn until the middle of April. Look how quickly the OKC legislature passed tax benefits for the Sonics. It took a matter of days.

The bottom line is that the city of Seattle and the state of Washington had zero interest in coming up with a new arena proposal. That is patently obvious. Chopp even stated in in plain English.

It is clear, in looking at the costs of arenas around the country that the price for the arena was perfectly in line with other similar arenas.

Schultz is going to have a hard time proving either the price was out of line, or the legislature didn't have enough warning.

And his lawyer was stupid to leave half the sentence in the side letter out of the lawsuit, as it looks like he was afraid that the judge would notice that an arena was required to keep the team in Seattle. If he's so sure that his case is good, the whole sentence should have been included. It looks bad to alter a statement that's in the public record.

[Nathaniele]

Well I am glad that you feel good about this, but after reading this Munson guy and listening to him, I am not feeling very good about it. Why would the top legal guy of espn flat out say that this case is in favor of Seattle?

What gets to me the most is, in my opinion if Larry, Curly and Moe could have just talked to one another and not had this all in writing, none of this would be a issue!

[Oh GAWD the Smell!]

Why would the top legal guy of espn flat out say that this case is in favor of Seattle?

Why? Because they're just like every other 24x7 news station. Ratings. Nasty, costly litigation between butthurt billionaires and seemingly slighted cities is just too lucrative for them. If there wasn't a fight, there would be no news and they'd go back to reciting stats and discussing the draft. So they'll prolong it. The mainstream press does the same thing with stories that aren't really stories. They've gotten more mileage out of bird flu than should be legal. Lightning kills more people. Hell...LAWNMOWERS kill more people.

I'm not saying that the lawsuit is going to fail or succeed, but sports media will milk it for more than it's worth and it's in their best interest to make a mountain out of a molehill...So don't be shocked when their "experts" take statements out of context and leave entire sentences out of quotes to make their point more valid. CNN, Fox, and MSNBC do it all day, every day.

[edcrunk]

Hell...LAWNMOWERS kill more people.

i'm interested in hearing more about these man killing lawnmowers!

[mburlison]

I'm with Paul. Situational ethics don't cut it. I guess I'll finish last.

[RabidRed]

I don't understand where lying is the issure here. No matter what was said about moving the team to OKC as a reason to buy the team, an effort was made to fulfill the contract. Bennett spent money and time to get the powers that be to approve a new arena. Those people didn't have any interest in spending money on the Sonics in order to keep them. Bennett gave them a year to change their mind and told them he would move the team if nothing could be worked out. Where is the lie? He did just what he promised to do. Now people are calling him a liar because behind close doors he and his partners where looking at options including moving to OKC (which they went into this in the first place hoping it would work out to do just that). Be this as it may, they tried to fulfill the contract made with Schultz.

I would agree that to lie and cheat to get something is not what we want to put our hat on. I just don't think you can call it lying or cheating in the way Bennett handled the attempt to keep the team in Seattle. Did he have other hopes? You bet he did. But he did all that he promised in the contract.

BTW, Seattle is a nice city and one that I have enjoyed going to. I couldn't live there due to the weather. I think they have the highest suicide rate in the country. Most of that attributed to the weather. But I digress....

[GWB]

I haven't read all of the emails that have been made public yet, so maybe what I'm about to say is off the wall. I thought that Bennett and his group complied with the agreement of his contract, and did what he was supposed to do to try to keep the team in Seattle. Am I correct so far? Now, I know that a while back McClendon said this, "We didn't buy the team to keep it in Seattle, we hoped to come here. We know it's a little more difficult financially here in Oklahoma City, but we think it's great for the community and if we could break even we'd be thrilled." He was fined a quarter of a million dollars for saying that. Ouch! Well, not for him obviously since he has plenty of $$$$$.

OK, so he said they hoped to come here at some point. But they still complied with their agreement with Schultz, right? If I remember correctly, Bennett pledged $100 million dollars towards the cost of a new arena in Seattle. Seattle had a chance to vote to fund the rest of it, but they turned it down. Who's fault is that? Not Bennett's.

Now, we all know that Bennett's group has always wanted to move the Sonics here, but they would have stayed had the conditions to build a new arena be met, right? Didn't happen, so they should be let off the hook. But they're not off the hook, because Bennett and his group of owners had some email conversations (and McClendon's comment) about moving the team back to OKC, all while they tried to live up to their end of the contract with Schultz. So, what's wrong with that? Nothing, in my opinion.

When Bennett and his group decided to buy the Sonics, they saw an opportunity to bring a basketball team to OKC. They knew they had to make a good faith effort to do what they could to keep them in Seattle--and they did. They probably knew that Seattle would not do what they needed to do to keep the team there. In other words, they saw the writing on the wall (they did their homework), and they felt that it would just be a matter of time, and Seattle's own doing, that the team would be able to move to OKC. Look at it this way. Bennett had two parallel tracks going at the same time. Track one--doing what he obligated himself to do in his contract with Schultz, which was to try to build a new arena (within a year) so that the team could remain in Seattle. Tract two--work on a plan to bring the Sonics to OKC, because he knew that Seattle would probably vote against approving funds for a new arena.

Doesn't that seem like a smart, common sense plan, to make plans to prepare the team to move to OKC, while at the same time, work towards honoring his contract with Schultz? Sure, he and the other owners didn't really think that the plan to keep the Sonics in Seattle would pan out, but it really doesn't matter what they thought, does it? Bennett fulfilled his obligation to Schultz, and that's all that really matters, at least from a legal stand point--right? Why should Bennett be sued for making plans to move the team here? Didn't he make a good faith effort to keep the team in Seattle? That's all he was obligated to do, regardless what emails he wrote, or what one of his partners said, he lived up to his contract--and that's all that matters.

To me, this shows why all these guys who own the Sonics are successful businessmen. These people are smart, astute, and appear to have a lot of common sense. True, they might have been better off had they been more discreet in discussing things among themselves, especially in writing. Regardless, they fulfilled their contract, so, what's the big stink all about? I don't get it.

For those of you who are much more "in the know" about this than I am, straighten me out, and tell me if I've got it wrong.

[kevinpate]

I see this statement, talking rather than email, a lot.
Assume for giggles and grins there was zero intent to ever play a day in Seattle.
Assume someone knew the team could not be purchased unless there was a dog and pony show put on to pretend Seattle was the cultural and bball center of the universe.
It seems some suggest it would have been ok to out and out lie if done so in a less detectable way.

For what it's worth, I don't think they lied. I do think they knew that short of coming in and building an arena 100% out of their own pockets the prospects of a new arena fell somewhere between no and hell no. As they were not required to do the arena on their own as part of the deal, choosing not to has nada to do with good faith.

I'm not near as impressed as the espn folks are with the suit. the whole concept of kill this deal but let me keep my profit and don't make me take the team back is just somewhat silly.

[Nathaniele]

It seems some suggest it would have been ok to out and out lie if done so in a less detectable way.

For what it's worth, I don't think they lied. I do think they knew that short of coming in and building an arena 100% out of their own pockets the prospects of a new arena fell somewhere between no and hell no.

I honestly don't care if they lied, I just care if they were stupid enough to get caught lying, that would end up costing OKC a team!

The bottom line is just getting a team here by whatever means, once we have a team no one will remember or care how we got it and it will be all water under the bridge! I am not saying I think they lied, I really don't care, just get a freaking team here already!

[flintysooner]

It is entertaining. I like it better than the political entertainment that's become kind of boring.

I think if we could get Larry Ellison involved and expand the drama to include the Microsoft guys - maybe even lure in Bill Gates with Ellison's participation - then this could provide some interesting twists.

I actually have tuned in to some of the sports radio shows. I have to say these are actually more mind numbing than expected however.