Spirit dispute is back in court

[WraithSentinel]

http://www.ajc.com/thursday/content/epaper...3b61ce0099.html

Spirit dispute is back in court

Tim Tucker - Staff

Thursday, July 6, 2006

Rockville, Md. --- Complaining that the Hawks and Thrashers continue to do deals without his consent --- including a recent unannounced extension of Thrashers general manager Don Waddell's contract --- estranged part-owner Steve Belkin today will ask a Maryland court to require the teams' other owners to post a bond in the hundreds of millions of dollars if they are to keep control of the franchises beyond next week.

Waddell's contract status and the bond request are revealed in court papers filed by Belkin in advance of a hearing this morning at which Montgomery County (Md.) Circuit Court Judge Eric Johnson will consider whether to stay, pending appeal, his earlier ruling that Belkin is entitled to buy out the other members of the Atlanta Spirit ownership group at cost by July 13.

Belkin says in his latest court filing that he does not object to a stay --- if it is conditioned on the other owners posting a bond to protect him against any drop in the franchises' value during their appeal. Belkin isn't specific about the amount of the bond he seeks, but suggests that the judge consider guideposts ranging from $120 million to $450 million.

The other owners --- a group led by Bruce Levenson, Ed Peskowitz, Michael Gearon Jr. and Rutherford Seydel --- are asking the court to stay its earlier ruling without requiring a bond. They say in court papers that they would have to put up the teams as collateral to meet even the smallest of the bond amounts suggested by Belkin. They also say "there is no guarantee" the NBA and NHL would allow the franchises to be used as collateral, and "to condition a stay on an unattainable bond would deprive [them] of the right to appeal."

The Waddell contract extension is cited in Belkin's filing as an example of the other owners' "unilateral" actions that justify a large bond to protect Belkin's interests. According to the court papers:

> The owners, including Belkin, received an e-mail from Atlanta Spirit CEO Bernie Mullin on June 22, asking if they had any "concerns or objections" about extending Waddell's contract.

> One day later, Mullin notified Belkin that he had "received a positive response" from the other owners and therefore would extend Waddell's contract --- without Belkin's approval.

> Three days later, Waddell got written notice of the contract extension.

Atlanta Spirit spokesman Tom Hughes confirmed Wednesday night that Waddell's contract has been extended. Hughes, citing company policy, wouldn't provide the length of the extension. Court papers don't provide the length.

Through a spokesman, Waddell --- the only general manager in the Thrashers' seven-year existence --- declined to comment on his contract extension.

Belkin's court filing also says that on June 16, "over the objection" of Belkin, the other owners adopted a " 'poison pill,' a $2 million loyalty bonus program which [Mullin] has discretion to dole out to Hawks, Thrashers and Philips Arena employees following the appeal."

The filing characterizes the program as an attempt by the other owners "to purchase the continued loyalty of their management supporters."

The non-Belkin owners say in court papers that they would do nothing to diminish the value of the franchises because, among other reasons, they expect to prevail on appeal and retain ownership.

But in the bid for a big bond, Belkin's attorneys submitted to the court a copy of the famous photograph of Hawks general manager Billy Knight refusing to shake Belkin's hand last summer. The Belkin filing asked: "Would the defendants reward their loyalist Hawks general manager, Billy Knight, with a long-term contract, spitefully leaving the incoming ownership with a huge long-term financial obligation to an employee who has amply demonstrated his antipathy to Mr. Belkin?"

Belkin's filing suggests the judge consider a variety of possible bond amounts: $120 million, said to be the amount the other owners internally project the teams to lose over the next three years; $140 million, the amount of a December appraisal of Belkin's 30 percent stake; $175 million, the amount the teams invested in new long-term player contracts last year; and $450 million, the approximate total value of the two teams and Philips Arena rights as extrapolated from the appraised value of Belkin's stake.

[mrhonline]

Quote:

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But in the bid for a big bond, Belkin's attorneys submitted to the court a copy of the famous photograph of Hawks general manager Billy Knight refusing to shake Belkin's hand last summer. The Belkin filing asked: "Would the defendants reward their loyalist Hawks general manager, Billy Knight, with a long-term contract, spitefully leaving the incoming ownership with a huge long-term financial obligation to an employee who has amply demonstrated his antipathy to Mr. Belkin?"

---

The Hawks should offer an extension to Billy NOW, just to spite CheapWad.

[DJ_Money]

Oh Lord...this is turning into one hell of a soap opera.

Quote:

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Belkin's court filing also says that on June 16, "over the objection" of Belkin, the other owners adopted a " 'poison pill,' a $2 million loyalty bonus program which [Mullin] has discretion to dole out to Hawks, Thrashers and Philips Arena employees following the appeal."

---

So, this must be the "Sorry, we lost the teams and you're out of a job." fund. Well, at least they're trying to take care of their employees...

Quote:

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But in the bid for a big bond, Belkin's attorneys submitted to the court a copy of the famous photograph of Hawks general manager Billy Knight refusing to shake Belkin's hand last summer. The Belkin filing asked: "Would the defendants reward their loyalist Hawks general manager, Billy Knight, with a long-term contract, spitefully leaving the incoming ownership with a huge long-term financial obligation to an employee who has amply demonstrated his antipathy to Mr. Belkin?"

---

Can we just have this whole thing moved to Divorce Court? Would make for good television...

[macdaddy]

What an a$$. Even before the breakup they didn't need his consent. They just need the other two groups to agree. Why would they need his consent now.

I hope he gets what's coming to him. Unfortunately it looks like he either gets the team or gets big bucks.

[DrReality]

I think it should be noted that the Spirit are trying to go on with running their business in a manner that is ethical and wise. Belkin's reaction on the other hand, while it may be wise legally, is showing his hand, or should say underhanded way. Not sure this will impact anything in court, but I would bet dollars to donuts that Stern and the other owners are paing attention. My hope is that he is not winning any brownie points with them.

The dude is ruthless and does not appear to care about who he steps on to get what he wants.

[Yeti]

Isn't Belkin arguing that the value of the team has increased so that they should have paid him a higher price for his share - based on the assessors? If so, it sounds like the current management has increased the value of the team under their management (without Belkin) and that should be an argument for leaving it in their hands during appeals. (but obviously I'm not a lawyer.)

[Diesel]

Dark Belkin has greater leverage now. Now, he has the right to buy the other owners out..

If you were about to buy a car, and had put down half of the payment, you wouldn't want the person that you were buying the car from to using the car as an evil Kanevil prop while you gathered your money together.

[AHF]

Look at the moves the Thrashers and Hawks have made over the last year. They are anything but outrageous. For the most part, they are well on the fiscally conservative side. Yet Belkin is asking that even this amount of money not be spent on the teams. Anyone question we are staring down the prospect of Sterling II?

[saiff]

I was initially against Belkin taking over but after seeing how dumb the non-Belkin owners appear to be, I'm all for it.

a) They allowed Belkin to have an awesome partnership agreement with all these out clauses. They did not think he would ever use them

b) They got out maneuvered in court

c) They keep a coach who had the worst record over an 82 game stretch so does not teach them defense, who forgets to put people in his rotation, takes out people who are on fire, doesnt know how to use players (ie diaw) and generally seems lost out there. Lets get a guy who has shown he knows how to get the most out of young guys.

d). We draft people in the last 2 drafts using opposite logic each time in order to get a player of lesser value/need. (ie. could have had paul last year=need but instead took value, could have taken foye=value&need this year but instead took need). Imagine a backcourt of paul, foye,johnson (and I would have traded our 2nd and cash to get marcus williams), and then a frontcourt of the joshs, harrington, zaza and bautista. Then we are one banger short of a great team.

e) Belkin has not shown anything to indicate he is the 2nd coming of the clipper's sterling. He wanted Joe Johnson, just not for all the picks. I think if Belkin gets sole control, we will get a GM and coach with track record of success. It cant be worse that it is now with these clowns running the show who let other teams roll over them, draft analysts laugh at them, and fans run away.

[AHF]

Quote:

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e) Belkin has not shown anything to indicate he is the 2nd coming of the clipper's sterling. He wanted Joe Johnson, just not for all the picks. I think if Belkin gets sole control, we will get a GM and coach with track record of success. It cant be worse that it is now with these clowns running the show who let other teams roll over them, draft analysts laugh at them, and fans run away.

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I guess it depends who you trust since it was reported in the media that Belkin wanted to lowball the payroll for both the Hawks and Thrashers and that he knew a straight max offer would be matched. It is undisputed that he doesn't want the team to add anything to the payroll this summer and is protesting things like signing Claxton, resigning Waddell, etc.

It is also undisputed that Belkin violated the partnership agreement trying to bar the JJ trade and has dragged the team through the mud since then without a moment of concern for the fans.

Obviously, there is absolutely no evidence he intends to invest $$ into either team like a good owner if you want to go back actions rather than statements in the media.

You trust Belkin to do what is best for the team if you want. I'll trust him to do what is best for himself.

[Final_quest]

I don't get the pro-Belkin crowd at all. The argument is based more on not liking Woody, BK, or not drafting Chris Paul. The fact that he has done well in court says nothing about his commitment to spending money to make the Hawks and Thrashers champions.

We know that the general talk from several sources is that he is cheap, but since there's an unknown possibility that he isn't cheap people want to believe the fantasy.

[Diesel]

Must agree here.

Belkin makes Legal swindles for a living...

Who is Steve Belkin?

By TIM TUCKER

The Atlanta Journal-Constitution

Published on: 08/10/05

He once was offered a basketball scholarship to Georgia Tech. He tried for 20 years to buy an NBA team. And now he is at the center of one of the biggest storms in Atlanta sports history. So just who is Steve Belkin?

The personal side

• Age: 57

• Grew up: East Grand Rapids, Mich.

•Lives: Weston, Mass., a Boston suburb.

• Education: Graduated from Grand Rapids (Mich.) High, Cornell University and Harvard (MBA).

• Family: Wife Joan, whom he met at Cornell, and two daughters (ages 29 and 26).

Sports background

Turned down a basketball scholarship to Georgia Tech. Quit the basketball team at Cornell because the practice schedule interfered with his studies. Played on the more flexible tennis, squash and soccer teams. Still an avid tennis player, has won his club championship 15 times.

How he made his fortune

An entrepreneur who has started 26 companies under the umbrella of Trans National Group, he hit it big in the direct marketing of group travel packages and credit cards.

Claim to fame

Pioneered the concept of the affinity credit card, the now-ubiquitous card that carries the name or logo of a sponsoring organization. "We started the whole affinity business back in 1982," Belkin said last year. "Now, it's over 50 percent of all credit cards." His company originated 12 million credit cards in the U.S. from 1983 to 1993, earning a fee for each approved applicant it generated. Then, in 1993, Belkin sold the domestic credit card business to Maryland National Bank and took the same idea overseas.

Claim to shame

Was fined $250,000 last year by NHL Commissioner Gary Bettman — a record fine for an NHL owner — for violating a gag rule and saying the league might use replacement players if the lockout lasted more than a year.

A day at the office

The Trans National building is next to Fenway Park in Boston. A basketball goal stands in a lobby, the Hawks logo on the backboard. Basketball memorabilia adorns Belkin's large, elegant office. Trans National's current businesses run the gamut: travel, telecommunications, selling books and videos to affinity groups, real estate and venture capital.

Chasing a team

In 1983, he had a letter of intent to buy the Celtics. In 2001, he almost had another deal to buy the Celtics. In 2002, he was a finalist to buy the NBA's Charlotte expansion franchise. Belkin's two-decade pursuit of owning a team was finally fulfilled with the Hawks purchase.

Farm system

Recently bought what he believes to be the oldest continuously operating farm in the United States — 200-acre Lookout Farm in Natick, Mass. It dates to 1680.

Atlanta presence

Attended about five Hawks home games last season.

Friends in basketball

Former Celtics general manager Jan Volk, who was in court with him Tuesday, and former Celtics great Larry Bird. When Belkin bought into the Hawks, Volk said: "He is combining his two passions — his passion for the game and his passion for business and marketing."

[drzachary]

Started 26 companies under the umbrella of Trans National Group?

Is he making a virus that's going to turn people into zombies?

[Blunt91]

The Umbrella Corporation from Resident Evil. That was a good one Dr. Zach.

[tmac13]

[saiff]

I'm not pro-Belkin but I am now anti-Spirit Group. They just appear to be complete morons when it comes to contracts, legal proceedings, coach selection, and player selection. I see the non-Belkin group as an F- and Belkin as an F+, both a failing grade. I just have not seen this group make any intelligent decisions to date. I'm still a little mad about the draft and BK is their guy. We chose a guy that has the potential to be Dale Davis who is a solid pro but not one anyone would pick in the top 5 or a guy who has the potential to be DWade and likes to shoot in the clutch. Basically, I hate all the owners at this point and I convince myself every morning before I go to www.ajc.com that Authur Blank bought the team the preceding night and has taken over immediately. He lost out on the Braves bid so maybe he will consider the lowly Hawks. I hope I'm wrong and the Hawks become good and we have a good owner(s) but I'm not keeping my hopes up.

The legal proceedings are just as much the rest of the groups fault as they are Belkin's. They put Belkin in charge by making him the governor and then basically ignored his decision. They disagree on how decisions were supposed to be made but it appears Belkin had everything spelled out while the the rest of the group just assumes everybody will follow the "spirit" of the agreement instead of the actual agreement. Buffoons against buffoon, for some odd reason I would rather just have one buffoon.

[TheDude]

i don't care how antiSpirit you are it comes down to how well do you want your team to be. If you wanting the team to be good outweighs everything else, you do not pick the solo baffoon. Intent is worse than buffoonery(word of the day). you have disagreements with how BK has done his offseason but you see many many people who agree with him. that leaves the possiblity he could be right. that possibility is light years more likely to happen than Belkin doing more for the team.

and honestly i like the Spirit ownership. sure they need to get better LAWYERS but you can only ask one thing of your ownership: try your best to win a championship, money is no object...that's all...now they may pick someone who may be the wrong choice but eventually more often than not, they'll eventually get the people they need to and replace them..and this group is trying their best i honestly feel.

there's really nothing else to REALLY screw up legally after this IF they make it through... DUMB PEOPLE LEARN. EVIL FOLK ARE JUST EVIL.