Turner owes $316 mill for Hawks/Thrashers-Jury

[jerrywest]

http://www.ajc.com/business/content/busine...age_tab_newstab

[HawkItus]

That is a shocking verdict. If they don't appeal, it should make an interesting collection adventure for him to recover that money.

[AHF]

I don't understand from the article what part of the contract was breached. Has anyone seen anything clarifying that? Is the notion that this was a done deal and Turner simply reneged?

[HawkItus]

http://atlanta.bizjournals.com/atlanta/sto...08/daily39.html

The jury found for the plaintiffs, represented by Bondurant Mixson & Elmore LLP, on breach of contract for $281 million and promissory estoppels. It found in favor of defendant Turner Broadcasting Systems Inc. on counts of breach of confidentiality and fraud.

If you read further I think the point the jury decided on was that the Spirit pretty much was allowed to negotiate from his supposed done deal.

Edited December 9, 2008 by sultanofatl

[AHF]

Thanks sultonofatl.

This looks like the key language to me:

McDavid contended senior executives at Turner told him he had a deal and that they went back on their word. Attorneys for Turner, which was represented by Troutman Sanders LLP and partner Jim Lamberth, argued McDavid’s claim lacked merit since contracts were never signed and finalized.

So his claim is basically that it was a done deal and they reneged.

This was a bit scary:

Turner claimed the teams lost tens of millions of dollars and that McDavid would not have been able to operate the teams with his personal wealth estimated at about $125 million.

Bear in mind that Garnett signed a contract in 1997-98 dollars for $126 million.

Edited December 9, 2008 by AHF

[DeacKillsaDevil]

Congrats! You won a piece of paper that says you are owed money. Have fun actually collecting it!

[Lascar78]

So the guy tries to buy something, and because they go back on their word, he's owed nearly 3 times his whole personal worth. That's amazing. I'm not saying they're wrong, but that's pretty amazing.

[AHF]

So the guy tries to buy something, and because they go back on their word, he's owed nearly 3 times his whole personal worth. That's amazing. I'm not saying they're wrong, but that's pretty amazing.

You know Belkin is loving the valuation of damages angle in this case. He would definitely like to win his case against the ASG and get a similar valuation of damages.

[Lascar78]

You know Belkin is loving the valuation of damages angle in this case. He would definitely like to win his case against the ASG and get a similar valuation of damages.

Yeah I guess so, but I don't think that this'll really have an effect.

I think he will definitely lose his case, and there will be no damages. I think in the end, the question will still be what price the franchise is valued at, which has no relation to this. However, I would imagine that if they end up doing a fresh set of appraisals, the value of the franchise might be significantly higher then when they did the first round. Of course it still is unlikely to be as much as his buddy the appraiser valued it at.

[AHF]

Yeah I guess so, but I don't think that this'll really have an effect.

I think he will definitely lose his case, and there will be no damages. I think in the end, the question will still be what price the franchise is valued at, which has no relation to this. However, I would imagine that if they end up doing a fresh set of appraisals, the value of the franchise might be significantly higher then when they did the first round. Of course it still is unlikely to be as much as his buddy the appraiser valued it at.

Looks to me like the jury just valued the ASG at roughly 370M - the amount of damages for the breach of contract + the purchase price. The only damages for a breach of contract claim is to put the person in the position they would have been in but for the breach. Since specific performance and giving the teams to McDavid is not possible, that would mean compensating him for the difference in value between the current value of the ASG and the price McDavid offered to pay. That number was 280M.

I think that will definitely be part of Belkin's argument as to why the original valuations were reasonable and proper going forward.

[TroyMcClure]

Just saw this in the ASG. I wonder what part the ASG, and more specifically, Ted Turner's son and son-in-law, played in the days after the verbal agreement with McDavid was in place and how they convinced the people from Turner to sell to them. Here is the article.

Turner owes $281M in Hawks-Thrashers lawsuit

Texas businessman sued after teams, arena rights were sold to Atlanta Spirit group

By KRISTI E. SWARTZ

The Atlanta Journal-Constitution

Tuesday, December 09, 2008

A jury ruled Tuesday that Turner Broadcasting System owes Texas businessman David McDavid $281 million for a breach of contract when it negotiated with — and eventually sold — the Hawks, Thrashers and Philips Arena operating rights to another bidder.

The decision does not mean McDavid now owns the teams. They remain in the hands of the Atlanta Spirit, an eight-member group of investors.

An appeal by Atlanta-based Turner Broadcasting, which is owned by Time Warner, is possible.

“Even for Time Warner, (that amount) is something that will get people’s attention,” said Alan Gould, an analyst with Natixis Bleichroeder, an investment bank in New York.

McDavid signed a letter of intent with Turner to buy the teams and arena rights in April 2003. The letter, granting exclusive negotiations, expired 45 days later, but the parties continued to talk. Turner announced in September of that year it was selling the teams to the Spirit.

The investors included the son and son-in-law of Ted Turner, founder of the Atlanta-based media company.

McDavid sued the company for $450 million in Fulton County Superior Court, accusing executives of four misdeeds. They included breaking an oral contract to sell the teams and arena rights as well as sharing his confidential financial information with the Spirit.

In the unanimous verdict Tuesday, the jury said Turner owes McDavid $281 million for disregarding a verbal deal and $35 million for essentially breaking a promise. The two amounts cannot be added together because of complicated legal reasons, so McDavid’s side said it will pick the larger one.

The jury ruled against McDavid on the two other counts. It said Turner Broadcasting did not share confidential information and did not commit fraud.

“We’re just very glad to have our day in court,” McDavid said in the courtroom immediately after the verdict. “It’s been five long years. We’re glad that a jury of 12 Georgians saw the validity of our claim. To us, it was never about the money, it was about the principle.”

Misty Skedgell, a Turner Broadcasting spokeswoman, said the company will weigh its appeal options.

“We are disappointed with the decision of the court and the jury’s interpretation of the facts in what was a complex business transaction,” she said. “We will carefully consider all options, including appeal and will announce any plans at the appropriate time.”

The trial started in early October. The jury had been deliberating since last Wednesday.

“Nothing was easy; we were split 50-50 to start,” said Ashish Gogia, the jury foreman, outside the courtroom. “We all walked in today not thinking we could get it done today.”

The first amount the jury awarded — $281 million — primarily represents the fair market value of the teams at the time of the sale minus the amount McDavid would have paid for them.

“It was as if he had the sale, and they were his teams,” Gogia said.

During the trial, McDavid’s lawyers pointed to several things to show that Turner Broadcasting had an agreement with McDavid. That included: a letter from Turner to Time Warner’s board asking for approval to sell the teams to McDavid; a draft press release announcing the deal with McDavid; and reams of documents that represented a purchase-and-sale agreement. They said the Spirit group was unfairly favored because Ted Turner’s son Beau and son-in-law Rutherford Seydel were among its partners.

For their part, Turner’s attorneys said those company memos and press releases were standard operating procedure and that none of the documents between the company and McDavid were ever signed. And, Turner executives as well as a few Spirit investors who testified said they never spoke with Ted Turner about the deal.

Gogia said in the end, it was all about who was telling the truth. That, and witnesses for McDavid testifying that Turner Broadcasting CEO Phil Kent said on a telephone call, “We have a deal.”

“The plaintiff’s side seemed a lot more truthful in how they handled the business negotiations,” he said. “For the defense, it seems like a lot of people were not on the same page. The witnesses — they were not on the same page.”

— Staff writer Paul Donsky contributed to this article.

[Guest]

Just saw this in the ASG. I wonder what part the ASG, and more specifically, Ted Turner's son and son-in-law, played in the days after the verbal agreement with McDavid was in place and how they convinced the people from Turner to sell to them. Here is the article.

http://www.hawksquawk.net/community/index....howtopic=334386

[macdaddy]

The two amounts cannot be added together because of complicated legal reasons, so McDavid’s side said it will pick the larger one.

This is my favorite part.