For the Record: Authority of NBA Governor to Veto Trade Authorized by Board of Managers

[AHF]

This is a recurring topic over the years that I would like to try to answer decisively on this thread.

The timeline on this is that:

(1) The Hawks entered trade discussions with the Suns to acquire Joe Johnson;

(2) There was internal disagreement among the ownership as to whether the Hawks should offer a max deal to JJ along with a trade of Diaw and two first round picks or whether that was too much;

(3) The Board of Managers of the Hawks voted on whether to authorize a trade on those terms and Belkin was outvoted 2-1.

(4) The Hawks went to move forward with the trade.

(5) Belkin used his position as governor to try to block the trade.

(6) Belkin rushed to Court to obtain a temporary injunction preventing him from being removed as team governor.

(7) The non-Belkin owners opposed the temporary injunction and as part of their opposition David Stern filed an affidavit with the court stating that a team governor taking action contrary to the direction of the Board of Manager was grounds for removal as the governor:

In part, the Stern affidavit read: ''My conclusion is that . . . if the Governor knows or reasonably should know that he is acting contrary to the wishes of a majority of the Board of Managers, and he nevertheless proceeds to take an action in connection with a material matter that legally binds the team, such as consummating a player trade or preventing the consummation of a player trade, the requirements for removal have been met."

(8) The Court removed the temporary injunction and told the non-Belkin owners they could remove Belkin with 5 days written notice if he continued to try to unlawfully block the JJ trade:

As expected, Massachusetts Superior Court Judge Allan van Gestel yesterday dissolved the temporary restraining order he granted Tuesday, preventing the owners of the Atlanta Hawks from removing Steven Belkin as NBA governor.

NBA commissioner David Stern submitted an affidavit Thursday that gave the Hawks permission to remove Belkin and install Michael Gearon Jr.

According to van Gestel, the owners must ''comply strictly with the requirements" in their ownership agreement. That means proper notice must be served to all parties involved. Thus, the seemingly inevitable removal of Belkin as Hawks governor may be delayed until next week.

But there remains one way Belkin can stay on as governor. Since blocking the sign-and-trade deal of Joe Johnson from Phoenix constituted the ''removable action," Belkin has five business days to approve the deal and preserve his current status.

(9) Belkin resigned as team governor and agreed to the buyout which is now the subject of ongoing litigation.

The question is:

Did Belkin as team governor have the right to block the trade without that being cause to remove him as team governor?

One poster yesterday claimed this question had been decisively answered and that a team governor can block the trade if he chooses to do so:

Now provide your authority for the proposition that a governor has the power to block a trade approved by the team's Board of Managers.

I have never seen this authority and the affidavit from Stern and ruling from the Court seem to make it clear to me that the team governor does not have the ability to stop action by the Board of Managers because if he does so he can be removed from his position for violating his duties as the team governor (which include implementing the decisions by the Board of Managers - not blocking them).

If you have any reason to think that the governor does have this authority or that Belkin was authorized to block the trade for JJ, this is your chance to answer the issue for the record.

[AtLaS]

Thanks for this, was very clear.

From the facts you stated above, it would seem the governor CAN block a trade as long as he has a majority stake in ownership. But, since Belkin only owned about 1/3, and was outvoted 2-1, then he didn't have the right to go against the majority. So based upon that, I do not think he had the right.

Not sure if that's what you're asking because I'm not great with cases.

[NJHAWK]

Bring back Ted and Jane.

[AHF]

From the facts you stated above, it would seem the governor CAN block a trade as long as he has a majority stake in ownership. But, since Belkin only owned about 1/3, and was outvoted 2-1, then he didn't have the right to go against the majority. So based upon that, I do not think he had the right.

I don't disagree with what you wrote but want to clarify that all this is saying is that if the governor also controls the Board of Managers that he can make the Board of Managers authorize action that the governor can then put into effect. Everyone agrees on that.

The disagreement is whether the governor can take or block action to legally bind the company if the governor's action is contrary to the express direction of the Board of Managers.

[AtLaS]

The disagreement is whether the governor can take or block action to legally bind the company if the governor's action is contrary to the express direction of the Board of Managers.

I see what you're saying, and I have no clue. I'm not good with the legal related cases so I'll just let more informed posters comment on that.

[exodus]

None of this will matter to DJ. he will keep saying Belkin is in the right now matter how many facts show otherwise.

[frankthetank966]

Do we want Belkin or no? I'm so confused? I though everyone hated him. But ASG sucks!

[jhay610]

Game, set and match to Mr. AHF.

[exodus]

Game, set and match to Mr. AHF.

That is usually how it ends when arguing with AHF.

[TroyMcClure]

That is usually how it ends when arguing with AHF.

Gentlemen call it debate, and treat it as such. I haven't seen anyone arguing.

[exodus]

Gentlemen call it debate, and treat it as such. I haven't seen anyone arguing.

That is because you didnt see the thread in question.

http://www.hawksquawk.net/community/index....howtopic=335358

[DJlaysitup]

IMO a Governor is a Governor...he is basically the "Executive Officer" of the club. Governors have the right to veto an action. If he doesn't then why bother having a Governor in the first place - it would make no sense. You should be able to impeach a Governor (like they did Blago), but that shouldn't be based on his logical judgement of a situatiuon (that should be based on some sort of misconduct which doesn't apply here).

The bottom line is that the Spirit group made Belkin their Governor, voluntarily, probably based on the fact that he invested the most money and (hopefully) that they trusted his judgement...then when he didn't agree with them...they had buyer's remorse and did all they could to take away that power/position. Still, when Belikn WAS in the position of Governor, he had the full power and authority to put a stop to the ridiculous activities that were going down at the time.

What you glossed over AHF is:

BK wanted to offer a max contract to lure JJ away from PHX - the Governor (Belkin) agreed.

Then came the S-n-T options:

BK made it a max contract plus Diaw (a previous high 1st round Hawks pick) - again Belkin agreed.

Then it jumped up to max contract, Diaw, and a future 1st round pick for JJ - the Governor (Belkin) again agreed.

Then it jumped to max contract, Diaw, a future 1st round pick, and ANOTHER future first round pick - the Governor said enough is enough and vetoed the offer.

If there is no authority for the team Governor to put a stop to this sort of thing at some point - what is the good of having a team Governor in the first place? I'm pretty confident that we will see that my logic is correct as the case comes to fruition. One judge has already ruled in Belkin's favor. :stirthepot:

[AHF]

IMO a Governor is a Governor...he is basically the "Executive Officer" of the club. Governors have the right to veto an action. If he doesn't then why bother having a Governor in the first place - it would make no sense. You should be able to impeach a Governor (like they did Blago), but that shouldn't be based on his logical judgement of a situatiuon (that should be based on some sort of misconduct which doesn't apply here).

The bottom line is that the Spirit group made Belkin their Governor, voluntarily, probably based on the fact that he invested the most money and (hopefully) that they trusted his judgement...then when he didn't agree with them...they had buyer's remorse and did all they could to take away that power/position. Still, when Belikn WAS in the position of Governor, he had the full power and authority to put a stop to the ridiculous activities that were going down at the time.

What you glossed over AHF is:

What I glossed over? How do you gloss over (a) the Stern affidavit; (b) the Court ruling; and (c.) the Belkin resignation?

BK wanted to offer a max contract to lure JJ away from PHX - the Governor (Belkin) agreed.

Then came the S-n-T options:

BK made it a max contract plus Diaw (a previous high 1st round Hawks pick) - again Belkin agreed.

Then it jumped up to max contract, Diaw, and a future 1st round pick for JJ - the Governor (Belkin) again agreed.

Then it jumped to max contract, Diaw, a future 1st round pick, and ANOTHER future first round pick - the Governor said enough is enough and vetoed the offer.

One issue with this. Belkin agreed to those issues as a member of the Board of Managers. He doesn't have authority to agree or disagree with a decision by the Board of Managers, however. His job is to implement that decision. Trying to "veto" the decision is grounds for removal. Belkin resigned before he was forceably removed. Add that to the list of facts and you will be closer to a complete set.

If there is no authority for the team Governor to put a stop to this sort of thing at some point - what is the good of having a team Governor in the first place?

Teams need a Governor. When there is a meeting of team representatives or action that needs to be administratively taken, someone has to be the point person for that. That is the Governor's role. It is an important role, but not one that trumps the power of ownership and Board of MAangers.

I'm pretty confident that we will see that my logic is correct as the case comes to fruition.

Let's place a bet on this. I will bet $2,000 to be donated to Hawksquawk if I lose and the Judge ultimately rules that Belkin had the power to veto the Board of Governors. You donate $20 if the case is resolved without that ruling.

I should warn you, however, that the issues in the lawsuit don't include whether the Governor has authority to trump a decision by the Board of Managers and therefore the Court literally can't rule on that issue. It was already litigated and decided against Belkin. The suit now deals with the buyout agreement - not the whether Belkin had the authority to veto the JJ trade. If you want to take me up on this, though, the Hawksquawk could use a $20 donation.

One judge has already ruled in Belkin's favor. :stirthepot:

Please give some authority on this. Your opinion doesn't move the ball.

Notably no judge has ruled that Belkin could overturn the decision of the Board of Managers to approve the JJ trade. There is only one Court ruling on that point and it is against Belkin holding that Belkin could be removed as Governor for trying to defy the decision of the Board of Managers. That issue is not part of the present lawsuit.

The ruling in favor of Belkin was on an entirely different issue (whether the ASG breached their obligations under the buyout contract), and it was overturned on appeal which means there is no ruling in Belkin's favor at this point and there is binding precedent ruling that he did not have power as Governor to overturn the decision of the Board of Managers.

You have still provided zero authority on this issue. Plus the logic is faulty. The ultimate authority for a team is clear - it is the Board of Managers, comprised of the ownership of the team. The Governor's role is clear - to implement the will of the Board of Managers and to be the representative of the Board of Managers in interacting with the league. As an agent of the Board of Managers, the Governor is subordinate to the Board. This is why Stern swore under oath that the Hawks could remove Belkin and why the Court ruled that Belkin could be removed with 5 days notice if he didn't stop trying to veto the trade. That ruling was not appealed and is not part of the present lawsuit. It is a done deal and decided against Belkin.

Find something in the NBA rules, in an announcement from Stern, etc. that a Governor has unilateral authority to overrule the Board of Managers and I will be on board with you. However, saying that you "logically" think that the Governor of the Dallas Mavericks can overturn any decision by Mark Cuban doesn't make it so. Cuban is the one with the power to bind the team and if his Governor tries to defy him and bind the team in a way contrary to what Cuban decides then he will be removed just like Belkin was. Simply put - the Governor can't do anything that is contrary to the binding will of ownership (through the Board of Managers in this case). This is why Belkin voluntarily stepped down as Governor. If he could have stayed on and controlled the team, he would have. He couldn't and he didn't and that is backed up by the Stern Affidavit and the Court's ruling. That ruling isn't even being challenged by Belkin.

[DJlaysitup]

Just have to keep the minority opinion out there :snowballfight:

We'll see how it all works out.

[DJlaysitup]

What I glossed over? How do you gloss over (a) the Stern affidavit; (b) the Court ruling; and (c.) the Belkin resignation?

So a Governor has no power at all eh? He just sits around and waits for the other dudes to tell him what to do? I think not....I think the "Governor" was impacted with certain powers and can use those powers when necessary.....

Pretty sure I'm right on this.

.

Edited March 7, 2009 by DJlaysitup

[exodus]

Please give some authority on this. Your opinion doesn't move the ball.

Belkin is right because i say so. It doesn't matter what the contract, Stern or the judges say. So there.

[DJlaysitup]

Belkin is right because i say so. It doesn't matter what the contract, Stern or the judges say. So there.

C'mon now - I'm not a Belkin lover or an ASG hater. I'm just looking at this logically (logic is what the law is often based on)...If the Governor can't veto (or otherwise exercise authority) then why have a Governor in the first place?

P.S. -13 points and 13 assists for Diaw last night.

Edited March 7, 2009 by DJlaysitup

[exodus]

C'mon now - I'm not a Belkin lover or an ASG hater. I'm just looking at this logically (logic is what the law is often based on)...If the Governor can't veto then why have a Governor in the first place?

That type of "logic" would get a good laugh in the courtroom.

The question isn't why have a Governor. The question is does the Governor have to right to veto a trade. The answer is clearly no. You have provided no documentation anywhere that says the Governor can veto a trade. AHF (who is a corporate lawyer) has provided plenty of documentation to show he can't veto a trade.

Game, set, match.

Your "logic" is that a guy with 30% of the team should be able to veto a trade approved by 70% of the ownership. That is about as logical as a square bowling ball.

70% > 30%

[DJlaysitup]

Game, set, match.

That last shot was on the line....going to a tie-breaker. We'll see what real judges rule. :stirthepot:

[exodus]

That last shot was on the line....going to a tie-breaker. We'll see what real judges rule. :stirthepot:

The real judges already ruled on this issue. It is no longer being contested which AHF already explained. The ability or inability of the Governor to veto trades is not even part of the current court case.

You might as well say that the Hawks-Detroit game tonight will have an effect on the Western Coference playoff race.