With one day left in court, almost anything could happen in Sterling case
JUL 27, 2014 11:00a ET
LOS ANGELES – Closing arguments are scheduled Monday in the trial that may determine whether Shelly Sterling can sell the Los Angeles Clippers – or whether her estranged husband can hang onto control of the franchise he bought in 1981.
What happens after that is anybody’s guess.
It’s not clear when Los Angeles Superior Court Judge Michael Levanas will rule – and not clear whether he’ll side with Shelly Sterling on three critical issues that are at the center of her effort to close the $2 billion sale of the NBA franchise to former Microsoft executive Steve Ballmer.
It’s not clear whether a new lawsuit filed by Donald Sterling, which asserts that he is the sole shareholder in the corporation that owns the team and therefore is the only person who can approve a sale, will come into play.
And it’s not clear whether, if Donald Sterling prevails in blocking the sale of the team to Ballmer, a federal anti-trust lawsuit he has filed will keep the NBA from confiscating the team and putting it up for auction – something league Commissioner Adam Silver has promised would happen Sept. 15 if the current deal is scuttled.
What is clear is that this chaotic situation – sparked by the disclosure in April of Donald Sterling’s comments to a girlfriend in which he told her not to bring African Americans to Clippers games – may not be resolved soon.
Clippers coach Doc Rivers and the team’s captain, Chris Paul, have both intimated that they may not stick around if Donald Sterling still has a controlling role with the team when the NBA season tips off in October.
The first three decades of Sterling’s ownership were lackluster – only four playoff appearances from 1981 to 2011. But the team improved significantly in recent years with stars like Paul and Blake Griffin.
Then came the recordings of Sterling’s comments to V. Stiviano. Among other things, he told her to stop posting photographs of herself with African Americans on social media websites.
NBA commissioner Adam Silver reacted swiftly, banning Donald Sterling from the league for life and initiating proceedings to strip him of ownership of the team.
Shelly Sterling, with her estranged husband's blessing, began the process of selling the team. But after he refused to sign off on the deal with Ballmer, she removed him from a decision-making position in the family trust that held the team’s parent company, LAC Basketball Club Inc. Shelly Sterling took that step after two doctors examined her husband of 58 years and concluded that he was suffering from dementia, likely as a result of Alzheimer’s disease, and could no longer manage his own affairs.
She then filed a petition in Los Angeles probate court seeking an order allowing the sale to be concluded. Donald Sterling opposed that petition. Now Judge Levanas must sort it out.
He has said he will decide on three issues:
-- Whether Shelly Sterling acted properly when she removed Donald Sterling as a trustee of the Sterling Family Trust.
-- Whether the Los Angeles probate court has jurisdiction in the case.
-- Whether he can issue an order allowing the sale to proceed even though Donald Sterling is likely to appeal.
On the first question, Shelly Sterling’s lawyers contend she followed all the rules outlined in the documents governing the trust – she had her husband examined by two licensed doctors, both of whom regularly are called upon to determine mental capacity, and that they both wrote reports certifying he was suffering from dementia.
Donald Sterling’s lawyers assert that she used undue influence and fraud to get him to submit to the medical exams and that she breached her fiduciary duty to him when she removed him from decision-making authority over the trust.
They also contend that this court has no jurisdiction to “bless” the sale to Ballmer, which must be completed by Aug. 15 or it will be off. Here’s why: On June 9, Donald Sterling “revoked” the trust, which had the practical effect of dissolving it. California law contemplates very little role for courts once a trust has been dissolved.
Shelly Sterling’s lawyers, however, argue that the sales agreement Shelly Sterling signed is akin to a financial obligation of the trust that must be honored before it can be formally dissolved.
They also argue that the judge can order that the sale proceed under a section of state law that would allow him to do that if he concluded that the assets of the trust would be harmed if the sale were blocked. They contend that if the sale to Ballmer is thrown out that the team will be put up for auction and will likely bring a lower price that the $2 billion he has offered.
Donald Sterling’s lawyers contend just the opposite – that if this sale is blocked, an auction at some point down the road would drive up the price for the team.
It’s possible Judge Levanas could rule on Monday.
What happens next, however, is anybody’s guess.
Donald Sterling’s lawyers have suggested that if they lose they will seek an injunction from the judge assigned to hear their new lawsuit. That suit contends that Donald Sterling is the sole shareholder in LAC Basketball Club Inc., and, as such, only he can sell the team.
And then there’s the federal anti-trust suit Donald Sterling filed. In it, he contends the league doesn’t have the legal authority to take the team away from him.