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Clippers sale hinges on legalities of family trust

By
July 02, 2014 |

LOS ANGELES — The $2 billion sale of the Los Angeles Clippers will hinge on the technicalities of family trust law and whether Donald Sterling’s estranged wife had the right to unilaterally negotiate a deal with former Microsoft CEO Steve Ballmer.

The July 7 trial will look at the trust’s terms alone and not focus on whether the 80-year-old Sterling is mentally incapacitated, Superior Court Judge Michael Levanas said Monday.

Attorneys will argue about whether Shelly Sterling properly followed the terms of the trust in declaring Donald Sterling to be mentally incapacitated and what happens to a deal that hasn’t been closed once a trust is revoked.

Shelly Sterling struck a deal to sell the team to Ballmer in May after Donald Sterling’s racist remarks to a girlfriend were publicized and the NBA moved to oust him as an owner.

She had two doctors examine her husband and they declared that he was mentally incapacitated and unable to act as an administrator of The Sterling Family Trust, which owns the Clippers. The terms of the trust say incapacitation can be determined by two licensed doctors without ties to the family who are specialists in their field.

In court filings, Donald Sterling’s attorneys argued that he submitted to medical examination under false pretenses, there was undue influence in the doctors’ findings, and that the examination and letters regarding his mental capacity were defective and incomplete.

“There was no duping,” Shelly Sterling’s attorney Pierce O’Donnell said Monday. Donald Sterling voluntarily went to Cedars Sinai Imaging Center to get scans of his brain and there was no requirement to remind Donald Sterling, who is an attorney, or his legal team of the trust’s conditions, O’Donnell wrote in court filings.

The judge said another issue likely to be “front and center” during the trial is what happens to a deal that hasn’t been closed when a trust is revoked. Donald Sterling revoked the trust on June 9 — weeks after Shelly Sterling negotiated the deal with Ballmer.

Shelly Sterling’s attorneys contend that finishing the deal is part of winding down the trust’s affairs and that she has an obligation to close the deal or Ballmer will sue.

But Donald Sterling’s attorneys argue that a revocation means probate court has no jurisdiction and that winding down affairs refers to passive actions, not a sale that markedly changes the assets in the trust and its value.

Timing has been an issue throughout the proceedings and the judge denied the request by Donald Sterling’s attorneys to postpone the trial. An expedited timetable was put forward from the beginning because NBA owners must approve what would be a record breaking deal and are scheduled to meet July 15 to vote.

That’s the same day Ballmer’s offer is set to expire — and there is no deal without the judge’s approval of the sale.

If the sale isn’t completed by Sept. 15, the league said it could seize the team and put it up for auction.

 

The Associated Press

The Associated Press

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