The Sacramento Bee reports on a possible snag in the deal between the Maloof Family and the Hansen-Ballmer group. A Bankruptcy Attorney overseeing Robert Cook's 7% share claims that a first right of refusal exists in the partnership agreement.
Another twist in this never-ending rollercoaster.
The Sacramento Bee's Dale Kasler reports today that a "First Right of Refusal" exists in the Partnership Agreement governing ownership of the franchise that gives the limited partners the ability to match any offer for the Kings. This was revealed by Bankruptcy attorney David Flemmer, who is overseeing the 7% of shares that were owned by Kings minority owner Robert Cook until he filed for bankruptcy.
Flemmer plans to assert the minority owners' rights at hearing next Thursday in Sacramento.
"Bankruptcy is a tool; this tool can be effective," Flemmer said. "We are very, very, very concerned that there's a deal being cut that's going to (ignore) that right."
The Bee reports that the Maloofs do not believe the limited partners have a right to match any offer, but if it does indeed exist, that could prove to be a big snag in their plans to sell the team to Hansen-Ballmer. While none of the Kings' current minority owners likely has the wealth necessary to match Seattle's offer, perhaps a partnership with the city's "whale" could do it. That's pure speculation on my part though as I'm not sure if the city was aware of this clause or if this clause will hold up in court.
I'm sure we'll hear more on this in the coming days, especially after next Thursday's bankruptcy hearing.
UPDATE 10:35 AM:
It was pointed out to me on Twitter that Michael Jordan executed a first right of refusal as a minority owner to match an offer for the Bobcats in 2010. ESPN wrote this article about it back then.
UPDATE 11:22 AM:
PBT can confirm that the 1991 Kings agreement contains a right of first refusal for minority owners.— Aaron Bruski (@aaronbruski) January 24, 2013
Bids for Bob Cook's 7% share in bankruptcy are due on April 1, the next hearing is scheduled for next Thu as reported by @ryan_lillis— Aaron Bruski (@aaronbruski) January 24, 2013
UPDATE 11:28 PM:
Kasler offers a different date than Bruski on the bid, we'll try confirm for sure whether Apr. 1st or 19th.
Auction of Bob Cook's 7% share of #NBAKings is April 19, during NBA Bd of Governors meeting in NY. Hmm.— Dale Kasler (@dakasler) January 24, 2013