First right of refusal - latest rumors, etc.

[Tetsujin]

Another breaking development, apparently RE was right. Minority owners have right to match a sales offer.
http://www.sacbee.com/2013/01/24/5138478/limited-partners-have-first-right.html

Flemmer, the court-appointed trustee overseeing the 7 percent share of the Kings owned by team limited partner Bob Cook, said Cook and other minority owners have "first right of refusal" to buy the club. He said that right is guaranteed in the partnership agreements governing ownership of the team.
That means the limited partners should be allowed to match the deal that the majority owners, the Maloofs, have struck with the group headed by hedge fund manager Chris Hansen.
Flemmer wouldn't go into details on legal strategy but said he plans to assert the limited partners' rights at a hearing next Thursday in U.S. Bankruptcy Court 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."
A source close to the Maloofs said recently that the family doesn't believe the limited partners have a right of first refusal. The Maloofs control 65 percent, the limiteds control the rest.

Read more here: http://www.sacbee.com/2013/01/24/5138478/limited-partners-have-first-right.html#storylink=cpy
​

 

[Jose]

Another breaking development, apparently RE was right. Minority owners have right to match a sales offer.
http://www.sacbee.com/2013/01/24/5138478/limited-partners-have-first-right.html

Now, THIS could be huge. Minority partners team up with the whale(s) to match Hansen's offer? Game over.

 

[hoops4kings]

Yes could be huge!

 

[JB_kings]

It is quite interesting about the first right of refusal. Even if the minority owner would have to be the majority partner in order for this to happen, it's a more workable. For example, the Benvenuti family owns a good chunk of minority ownership. Plus they just got $600 million for selling off all of Joe Benvenuti's property last month. They can buy the team for a certain amount of time than turn around and sell to the minority shareholders, Burkle and Mastrov for a nice profit!

 

[Warhawk]

It is quite interesting about the first right of refusal. Even if the minority owner would have to be the majority partner in order for this to happen, it's a more workable. For example, the Benvenuti family owns a good chunk of minority ownership. Plus they just got $600 million for selling off all of Joe Benvenuti's property last month. They can buy the team for a certain amount of time than turn around and sell to the minority shareholders, Burkle and Mastrov for a nice profit!

Agreed. Could be a game-changer. I love it when a plan comes together!

 

[whozit]

There is also something about the City having the right to see the sales agreement.

http://www.sactownroyalty.com/2013/1/24/3910922/the-city-needs-to-get-the-kings-sale-agreement-now

If this link isn't allowed, please delete.

 

[Ryan]

Agreed. Could be a game-changer. I love it when a plan comes together!

Where's Brick's opinion when you need it?

 

[Warhawk]

There is also something about the City having the right to see the sales agreement.

http://www.sactownroyalty.com/2013/1/24/3910922/the-city-needs-to-get-the-kings-sale-agreement-now

If this link isn't allowed, please delete.

Links are fine (in fact, welcomed and encouraged!) but we just can't copy/paste swaths of text from the article. A few sentences are usually OK though if there is a specific point to relate. But we typically only do that from say, newspapers or online articles from major/nationwide media sources. Sources like STR we usually just put a link in and no text.

 

[Larry David]

Wow right to match may be a complete game changer. This is could end this for Sac. And the news is from RE! If you told vf21 in 2006 that re would be the person that broke the good news that resolved the arena issue, you could have made a lot of money

 

[Circa_1985_Fan]

Ryan Lillis ‏@Ryan_Lillis
Senate Pro Tem Steinberg, Mayor Johnson, other elected officials meeting at Steinberg’s office at 3 pm. Press conference to follow
------------

I wonder if any minority owners will be present at this meeting/presser, since this meeting probably has everything to do with the legalities of the sale?

 

[Section 101]

There is also something about the City having the right to see the sales agreement.

http://www.sactownroyalty.com/2013/1/24/3910922/the-city-needs-to-get-the-kings-sale-agreement-now

If this link isn't allowed, please delete.

I would think the minority owners would get a copy.

 

[Jose]

Ryan Lillis ‏@Ryan_Lillis
Senate Pro Tem Steinberg, Mayor Johnson, other elected officials meeting at Steinberg’s office at 3 pm. Press conference to follow
------------

I wonder if any minority owners will be present at this meeting/presser, since this meeting probably has everything to do with the legalities of the sale?

I hope it has to do with the loan coming due because they have entered into a "binding" sales agreement. Would be awesome if they came up with something along those lines and found a way to bill the Maloofs $77 million due immediately and put a legal hold on the sale, as there is some team equity being used as guarantee for the loan.

 

[whozit]

I would think the minority owners would get a copy.

The article seems to indicate the City has a right to sales agreement because of the loan agreement and the collateral. If the minority owners have right of first refusal then most definitely. It seems the Maloofs don't recognize anyone's rights but their own.

 

[UK_King]

I thought the minority owners "share" was locked up in bankruptcy court?

 

[Section 101]

The article seems to indicate the City has a right to sales agreement because of the loan agreement and the collateral. If the minority owners have right of first refusal then most definitely. It seems the Maloofs don't recognize anyone's rights but their own.

I don't think the right of refusal has anything to do with it. They are part owners of the organization, it's their duty to check that a transaction like a sale is done correctly and legally as they could be responsible for any errors.

 

[Section 101]

I thought the minority owners "share" was locked up in bankruptcy court?

Only the 7% of Bob Cooks. The other 28% is fine.

 

[LWP777]

Just a random thought I had.....here is a list of all the things the Magoof Brothers have failed at or destroyed:

1. Sacramento Kings
2. Sacramento Monarchs
3. Palms
4. Beer distribution business
5. Magoof Money Cup (skateboarding)
6. Magoof Productions
7. Magoof Music

Have I missed anything? Seriously, what have they been successful at in creating or building?

 

[funkykingston]

Seriously, what have they been successful at in creating or building?

Animosity?

 

[HndsmCelt]

Yes this could be a game changer but, there are issues that will need to be resolved first. The bad news for impatient fans is that this means attorneys and likely law suits and that means it could go on for a long, long time. The good news is that a protracted court battle may scare off Seattle. IF some or all of the minority owner's contracts do contain a right of first refusal. then the question is "is this an enforceable clause" No doubt the Maloofs attorneys will argue no and may will take the deal to court. We can safely assume that if such clauses exist that some or all of the minority owners will be amiable to borrowing the funds with favorable terms from potential buyers and exercising their option. So they will have to get an injunction to stop the sale to Hanson. (law suit 1) The Maloofs will likely counter sue (law suit 2) add this to the 2 law suits in Seattle to stop the arena up there that makes 4 law suites with ought to be enough reason for the BOG to put the deal on ice until the suites are settled. hen it becomes Monday on the Micky Mouse club. (anything can happen day)

 

[Kingsguy881]

Animosity?

Quite. Lol...

 

[Ryan]

Yes this could be a game changer but, there are issues that will need to be resolved first. The bad news for impatient fans is that this means attorneys and likely law suits and that means it could go on for a long, long time. The good news is that a protracted court battle may scare off Seattle. IF some or all of the minority owner's contracts do contain a right of first refusal. then the question is "is this an enforceable clause" No doubt the Maloofs attorneys will argue no and may will take the deal to court. We can safely assume that if such clauses exist that some or all of the minority owners will be amiable to borrowing the funds with favorable terms from potential buyers and exercising their option. So they will have to get an injunction to stop the sale to Hanson. (law suit 1) The Maloofs will likely counter sue (law suit 2) add this to the 2 law suits in Seattle to stop the arena up there that makes 4 law suites with ought to be enough reason for the BOG to put the deal on ice until the suites are settled. hen it becomes Monday on the Micky Mouse club. (anything can happen day)

And to think the Maloofs could have potentially avoided ALL this by simply selling to a local owner in the first place. Let's hope the Maloofs quest of revenge on Sacramento and the NBA destroys their plans.

 

[HndsmCelt]

Ryan, I have never discounted the idea that the Maloofs talks with Virgina Beach and Seattle were little more than efforts to pump the value of their shares to the point they could sell and walk away with money after paying off their debt. I am sure for what ever post-rational reasons they have, they would prefer to see the team leave, but in the end I think they will be glad to take an offer over 400 mill for their shares.

 

[kupman]

Just a random thought I had.....here is a list of all the things the Magoof Brothers have failed at or destroyed:

1. Sacramento Kings
2. Sacramento Monarchs
3. Palms
4. Beer distribution business
5. Magoof Money Cup (skateboarding)
6. Magoof Productions
7. Magoof Music

Have I missed anything?

Family pride/legacy

 

[Larry David]

So Bob Cook’s 7% is going up for auction and the trustee must sell it to the highest bidder. And the person that wins the auction may/has the legal right to match the Seattle offer. We may see KJ’s Whale (Burkle led?), Hansen/Balmer, and other parties … Ellison? MVP??? go to war chasing that 7%.

The result could wrap things up for Burkle, make this insanely expensive for Hansen, or put some other third party in control of the Kings. Crazy.

The sale is the best thing that could have ever gone down for Bob Cook. Stupid Maloofs. Somebody must have told them … the others can’t afford it and Cook’s shares are tied up in bankruptcy, so they won’t have time to match. But if the Court doesn’t agree, then Maloofs just put an extreme premium on Cook’s share, which could end this for Seattle.

Because this isn’t the league picking a winner, Hansen’s 30 million dollar deposit give him no leverage against the league in a suit. It’s just the old Sac Kings sales contract, to which they aren’t even a party. It might give Hansen grounds to sue the Maloofs to get his deposit back if this issue was under sold (wouldn’t put it past the Maloofs to just omit it.)

Bad day for Maloofs and Hansen.

I don’t know if Burkle wants to pay maybe something like 300% of market for Cooks 7%, on top of the $340 million for the other 65% of the team …. but if he does and the Court says Cook’s right to match is stayed by the bankruptcy, this might be a walk off for Sacramento.

And if this issue is still hung up in the Courts in April, there will be at least 8 votes to say “Not now, come back later, for Seattle’s sale.”

 

[Section 101]

So Bob Cook’s 7% is going up for auction and the trustee must sell it to the highest bidder. And the person that wins the auction may/has the legal right to match the Seattle offer. We may see KJ’s Whale (Burkle led?), Hansen/Balmer, and other parties … Ellison? MVP??? go to war chasing that 7%.

The result could wrap things up for Burkle, make this insanely expensive for Hansen, or put some other third party in control of the Kings. Crazy.

The sale is the best thing that could have ever gone down for Bob Cook. Stupid Maloofs. Somebody must have told them … the others can’t afford it and Cook’s shares are tied up in bankruptcy, so they won’t have time to match. But if the Court doesn’t agree, then Maloofs just put an extreme premium on Cook’s share, which could end this for Seattle.

Because this isn’t the league picking a winner, Hansen’s 30 million dollar deposit give him no leverage against the league in a suit. It’s just the old Sac Kings sales contract, to which they aren’t even a party. It might give Hansen grounds to sue the Maloofs to get his deposit back if this issue was under sold (wouldn’t put it past the Maloofs to just omit it.)

Bad day for Maloofs and Hansen.

I don’t know if Burkle wants to pay maybe something like 300% of market for Cooks 7%, on top of the $340 million for the other 65% of the team …. but if he does and the Court says Cook’s right to match is stayed by the bankruptcy, this might be a walk off for Sacramento.

And if this issue is still hung up in the Courts in April, there will be at least 8 votes to say “Not now, come back later, for Seattle’s sale.”

Um, Benvenuti's just sold all their property for like $800 mil. Could buy the team then turn around and sell it to Burkle.

 

[Glenn]

I wonder what Mama Maloof thinks of her kid's stewardship of the family fortune.

I thought of throwing in their failure to provide grandchildren for their mother into the pot but decided against it - -- or did I

 

[Fear the Putin]

Flemmer is gonna present his case to the bankruptcy court IN Sacramento next Thursday.

Come on Steinberg and KJ...I know you can pull some strings.

 

[Larry David]

Um, Benvenuti's just sold all their property for like $800 mil. Could buy the team then turn around and sell it to Burkle.

Nice!!!! Well played Maloofs!!!! Not one, but maybe two groups may match. I would give anything for Hansen to pay $$$$ to lock up Cooks share, have the right to match his own offer, and then Benvenuti comes in buys the team and flips them to Burkle. Enjoy your 7% Steve.

The hearing is the day before Hansen has to put 30 million in the Maloofs pocket!!! This is too good!!!

 

[JB_kings]

I don't even think it will hinge on Cook's shares. It will go in order of percentage owned. It goes in order like this:

Maloofs - 53%
Benvenuti - 13%
Hernreich - 12%
Kheriotis - 12%
Cook/auction - 7%
Luccheti owns the remaining percentage.

So they should have to go to Benvenuti family first. Kind of explains why the Maloofs have yet to contact the minority owners yet. Probably trying to steam roll them.

 

[Section 101]

So Bob Cook’s 7% is going up for auction and the trustee must sell it to the highest bidder. And the person that wins the auction may/has the legal right to match the Seattle offer. We may see KJ’s Whale (Burkle led?), Hansen/Balmer, and other parties … Ellison? MVP??? go to war chasing that 7%.

The result could wrap things up for Burkle, make this insanely expensive for Hansen, or put some other third party in control of the Kings. Crazy.

The sale is the best thing that could have ever gone down for Bob Cook. Stupid Maloofs. Somebody must have told them … the others can’t afford it and Cook’s shares are tied up in bankruptcy, so they won’t have time to match. But if the Court doesn’t agree, then Maloofs just put an extreme premium on Cook’s share, which could end this for Seattle.

Because this isn’t the league picking a winner, Hansen’s 30 million dollar deposit give him no leverage against the league in a suit. It’s just the old Sac Kings sales contract, to which they aren’t even a party. It might give Hansen grounds to sue the Maloofs to get his deposit back if this issue was under sold (wouldn’t put it past the Maloofs to just omit it.)

Bad day for Maloofs and Hansen.

I don’t know if Burkle wants to pay maybe something like 300% of market for Cooks 7%, on top of the $340 million for the other 65% of the team …. but if he does and the Court says Cook’s right to match is stayed by the bankruptcy, this might be a walk off for Sacramento.

And if this issue is still hung up in the Courts in April, there will be at least 8 votes to say “Not now, come back later, for Seattle’s sale.”

Slight catch. The bids are due April 1. The auction ends the same weekend as the BoG meetings. I assume this was setup so the new minority owner would be approved during the meeting.