Clippers owner Donald Sterling loses in court, judge allows $2B team sale to ex-Microsoft CEO
Monday, Jul 28, 2014 09:00 pm
LOS ANGELES, Calif. - Embattled Los Angeles Clippers owner Donald Sterling lost his attempt to block the $2 billion sale of the team to former Microsoft CEO Steve Ballmer.
In allowing the deal to go forward, Superior Court Judge Michael Levanas sided Monday with Sterling's estranged wife, Shelly Sterling, who negotiated the record sale after the NBA banned the 80-year-old billionaire for making offensive remarks about blacks.
Shelly Sterling sought the probate judge's approval to ink the deal after taking over the family trust that owns the team because doctors found Donald Sterling had signs of Alzheimer's disease and couldn't manage his affairs.
The judge said Shelly Sterling had negotiated a good deal and the removal of her husband as a co-trustee was in good faith and not part of a secret plan to seize the team.
Shelly Sterling hugged her lawyer and wept after the judge explained his ruling from the bench.
"I can't believe it's over," she said. "This is the best thing."
An unusual provision of the ruling bars Donald Sterling from seeking a court-ordered delay of the sale as he appeals. His lawyers plan to seek permission from an appellate court to file an appeal.
Sterling was not in court for the ruling. Bobby Samini, one of his lawyers, said Sterling reacted calmly to the news and told his lawyers they had to keep battling on other fronts. Sterling testified during the case that he would fight the NBA until his death.
With lawsuits pending in state and federal courts, the ruling in Los Angeles County Superior Court is unlikely to put an end to the bizarre saga that began in April when a recording surfaced of Sterling scolding his young girlfriend for bringing black men to Clippers games.
The NBA moved quickly to ban Sterling for life and fined him $2.5 million.
Sterling was apologetic after the audio recording went viral, but his mea culpa backfired when he criticized Lakers great Magic Johnson, who had been photographed with Sterling's girlfriend, as a bad role model for kids because he had HIV. Sterling was roundly condemned from locker rooms to the Oval Office, where President Barack Obama called Sterling's remarks "incredibly offensive racist statements."
With the NBA threatening to seize the team and auction it, Sterling initially gave his wife of 58 years permission to negotiate a sale but then refused to sign the $2 billion Ballmer deal, which would be a record price for an NBA team. He said he would sue the league instead and then revoked the trust, which his lawyers said effectively killed the deal.
The nonjury trial held over several weeks focused mainly on whether Shelly Sterling properly removed her husband as a trustee and whether her actions carried any weight after he revoked the trust.
Donald Sterling claimed his wife had deceived him about the medical exams. His lawyers argued Monday that Shelly Sterling's lawyers were in cahoots with the doctors who examined him and that his wife conspired with NBA Commissioner Adam Silver to remove him from the trust.
"There's no evidence, I'll repeat that as loudly as you allow," attorney Maxwell Blecher said during closing argument, his voice rising. "There's no evidence that Mr. Sterling was incapable of carrying out his duties as a co-trustee."
Levanas said there was no credible evidence that Sterling was defrauded.
Blecher said he was deeply disappointed in the judge's legal analysis.
The ruling Monday was tentative until the judge files it in writing.
NBA spokesman Mike Bass said in a statement that the league was pleased and looked forward to the transaction closing as soon as possible.
At the conclusion of his lengthy ruling, Levanas envisioned what might happen if Donald Sterling remained the owner.
Citing testimony of Clippers interim CEO Richard Parsons, he said the team would go into a "death spiral." Sponsors would withdraw, players would quit and coach Doc Rivers would leave.
"The Clippers would suffer a massive loss of value if the team survived at all," Levanas said.
The judge was adamant that a team owned by Donald Sterling would not draw a price anywhere near the "stunning" $2 billion pledged by Ballmer. Sterling, a lawyer who made a fortune as a landlord, bought the team in 1981 for $12 million.
"Ballmer paid an amazing price that can't be explained by the market," he said.
On the witness stand, Shelly Sterling was more credible than her husband, who was more evasive, gave inconsistent answers and presented wild fluctuations of damage estimates, Levanas said.
He noted that the couple presented genuine professions of love for each other despite Donald Sterling's outburst calling his wife a "pig" after she testified.
Outside of court, his wife said she thought her husband would be happy with the ruling. She said she thinks he will ultimately drop his antitrust suit in federal court against the NBA and the lawsuit he filed in state court against her, Silver and the league.
Her lawyer wasn't so sure. Asked what might stop the deal, Pierce O'Donnell said: "Donald."
"He never met a lawsuit he didn't like," he quipped.
Bruce Givner, a Los Angeles tax attorney who handles celebrity cases, said he thinks Sterling's lawsuits will fail and an appeals court won't care about the probate case.
"I think the sale is going to go through," Givner said. "I suspect the NBA is ready to move very quickly. They want to get rid of Sterling like a canker sore. Nobody wants him around except the people that are charging legal fees to continue this charade."
AP Special Correspondent Linda Deutsch contributed to this report.