In a decision that could lead to an expedited sale of the Los Angeles Clippers, a judge tentatively ruled today that Shelly Sterling had full authority to negotiate the proposed $2 billion sale of the team, and the transaction can move forward even if Donald Sterling appeals the decision.
Shelly Sterling’s eyes filled with tears after Los Angeles Superior Court Judge Michael Levanas made his ruling — which took nearly an hour for the judge to issue.
“I’m glad it’s over,” she said.
Donald Sterling’s attorney, Max Blecher, said outside court, “I’m deeply disappointed.”
Levanas gave a sweeping victory to Shelly Sterling, tentatively rejecting claims by Donald Sterling that he was duped into a pair of exams by doctors who found him mentally incompetent. Those medical decisions formed the basis for Shelly Sterling to take charge of the Sterling Family Trust and negotiate the sale to former Microsoft CEO Steve Ballmer.
The judge said there was credible evidence that Shelly had “noticed that Donald’s behavior was changing” due to the possible onset of dementia and she was “legitimately concerned” with her husband’s health when she scheduled the mental exams.
Shelly was motivated “solely by her concerns for his well-being,” Levanas said, adding that despite the couple’s estrangement, there remains genuine affection between the pair.
There was no “secret plan to remove (Donald Sterling) from the trust,” the judge concluded.
The judge also shot down Donald Sterling’s contention that his revocation of the family trust removed his wife’s authority to sell the NBA franchise.
Shelly had “full authority” to sell the team to Ballmer, Levanas said.
“She clearly had the authority to engage in this contract,” the judge said, adding that he believed Ballmer’s bid “will not be duplicated in any auction going forward.”
Anwar Zakkour, a Bank of America investment banker who advised the Sterling trust on the proposed sale, testified last week that there were three bids for the team — at $1.2 billion, $1.6 billion and Ballmer’s offer of $2 billion. The judge said today that if Ballmer’s offer “dies,” the Clippers would stand to lose $400 million, according to Zakkour’s testimony.
“The value would drop substantially,” Levanas said, adding that he found validity to testimony that some players and head coach Doc Rivers might leave the team if Donald Sterling retained ownership. Five or six major Clippers sponsors — including Mandalay Bay Resort and Casino and Kia Motors America — would likely end their involvement with the team, the judge said.
In the most critical part of the decision, however, Levanas’ tentative ruling would enact a clause of state probate law that would allow Shelly to move forward with the sale, even if Donald Sterling files an appeal. Attorneys for Donald Sterling had implored with Levanas not to enact the clause, saying there was no evidence that any harm would come to the team if the sale was delayed pending an appeal.
Shelly Sterling’s attorneys have until 4 p.m. Tuesday to file a proposed “statement of decision,” and Donald Sterling’s side has 15 days to file an objection before the ruling can become final.
Sterling’s attorneys could also file a special writ challenging Levanas’ decision to allow the sale without an appeal of his ruling. Sterling has also filed a separate lawsuit challenging Shelly Sterling’s right to sell the team based on corporate law.
He also has a civil rights lawsuit pending in federal court against the NBA, claiming he was being railroaded out of the league in violation of his constitutional rights.
Outside court, Shelly Sterling said she was confident her husband would eventually “be happy” with the outcome of the case and the sale of the team, and she was “sure” he will drop his legal challenges to the deal.
Mike Bass, the NBA’s vice president of communications, said the league was “pleased that the court has affirmed Shelly Sterling’s right to sell the Los Angeles Clippers to Steve Ballmer. We look forward to the transaction closing as soon as possible.”
Donald Sterling, who purchased the Clippers in 1981 for $12.5 million, has been under pressure to sell the team since the release of recorded conversations between him and companion V. Stiviano. In those conversations, Sterling criticizes Stiviano for having her picture taken with black people and tells her not to bring them to Clippers games.
The comments earned Sterling a lifetime ban from the NBA, which initiated actions to strip the Clippers from him. The league put those efforts on hold pending a decision on Shelly Sterling’s ability to sell the franchise.
