Gearon: Spirit ready to welcome Belkin back

[DrReality]

All in the family?

Gearon: Spirit ready to welcome Belkin back By SEKOU SMITH

The Atlanta Journal-Constitution

ShareThisPrint

E-mail

Reprints

After over four years of legal fighting, the Hawks and Thrashers fractured ownership group is one big — and not necessarily happy — family again.

.Steve Belkin is back in as a minority owner, with the same rights he had as a minority owner before he and his seven partners began feuding in August 2005.

It’s business “as usual,” according to Hawks part-owner Michael Gearon Jr., who said Tuesday that the group has operated in that manner since the split four years and nearly two weeks ago.

A Maryland judge ruled Monday that the eight-man ownership group, Atlanta Spirit LLC, resume operations as it was before its acrimonious break-up in 2005. Montgomery County Circuit Court Judge Durke G. Thompson ruled that the contract the owners had reached that would allow the seven owners to buy out Belkin was too ambiguous.

Belkin has the right to appeal Monday’s ruling. But until any move is made, Gearon said operations for both franchises will continue as is.

“I can’t speak for what Steve will or won’t do,” Gearon said. “But I can tell you that one thing people fail to realize is that over the course of these last four years, we’ve been operating these franchises and making decisions ... which Steve has participated in.

“Steve has actively participated in meetings that we’ve had, in which our [general managers] have made recommendations and there hasn’t been a situation where there was contention and we did not go in a direction our [general managers] wanted to go.”

Belkin has options, one of them much more costly than the others.

Should he decide to stay in the group as a minority owner, Belkin would be required to pay his partners $25.8 million, according to court documents, which represents his 30 percent share of cash calls made during litigation.

He could appeal the court’s decision, but he would likely have to post a multi-million-dollar bond, at the court’s discretion.

Or Belkin could also exercise what amounts to an opt-out clause in the Spirit’s original partnership agreement and ask his partners to buy him out.

Thompson’s 38-page ruling actually encourages the owners to settle the feud without the aid of investment bankers or other outside parties. That might have happened four years ago had the NBA, and specifically Commissioner David Stern, not made it “clear that it desired the Belkin interest to be bought out,” Thompson noted in his ruling.

It is clear the entire costly affair might have been avoided at some point during the last four years had the sides ever been able to determine a settlement outside the courtroom. But that never happened.

“There was a lot of dialogue at different points during the last three or four years,” Gearon said, “but nothing that was ever close enough where we could say this matter was going to be settled.”

Attorney Steven Estep, who is representing Gearon and Washington, D.C.-based Spirit part-owners Bruce Levenson and Ed Peskowitz, said it “never got close.”

Gearon also dismissed rumors that the Thrashers are for for sale, insisting that the Spirit is simply “looking for other investors,” the same way Falcons owner Arthur Blank did recently.

“The biggest benefit from [Monday’s] decision is the black cloud that is no longer over Bruce Levenson, Ed Peskowitz and myself, with respect to the personal obligation to buy out Belkin,” Gearon said.

For fans weary of another round of legal maneuvering, Etstep cautioned that Monday’s ruling does not open that door.

“That would be the wrong conclusion to draw, because this legal process from the last four years has all spawned from that purchase and sale agreement that has now disappeared,” he said. “There is no basis to start this process again. Now we are back to an operating agreement that is clear and unambiguous. It’s not going to lead to bad things.

“It’s the same as it was before. And that’s a good thing. It’s not going to lead to bad things. Belkin can stay in if he wants. He has to catch up on his cash calls, which I don’t think is a significant enough amount of money to alter the future of the franchises. Or he can exercise his put and ask the other owners to buy him out. It’s pretty cut and dry.”

Edited August 19, 2009 by DrReality

[DrReality]

25 mil is a good chunk of change. Seems that could be used as a credit for whatever they would buy him out for?

[gsuteke]

The ASG doesn't want to buy him out, that's obvious. The Hawks and Thrashers are a sunken cost and I'm not convinced they've got the assest to buy out Belkin's stake. If they did they wouldn't have included him in the deal to begin with, see my point? If any of these guys had the liquidity to buy the Hawks they would have done it on their own.

[DeacKillsaDevil]

This is easy. Find new investors and use their money to buy out Belkin.

[Diesel]

At this point, ASG should have been able to find a few investors who could step in and help them buy out Belkin. I suggest Ted Turner or somebody with real money. Being that Belkin owes the Spirit 25.8 Million.. I say use that as part of his buy out. If he spent 70 Million to get in, I would pay him 60 Million as a Buyout. That's a grand total of 85 Million for Belkin. That's 15 Million profit.

[ATLSmith]

Okay, this has been said before but....

Save us Arthur Blank!!!

If Belkin does stay and can't pay his debt immediatly they'll probably structure some payoff plan with interest.

[DrReality]

Okay, this has been said before but....

Save us Arthur Blank!!!

If Belkin does stay and can't pay his debt immediatly they'll probably structure some payoff plan with interest.

I can't see Blank getting involved in this mess. He's too smart.

[WraithSentinel]

I think the Braves are the top of Blank list should get get another sports team. He does have time for another one since the AFL folded. He no longer has to worry about that. Belkin is no longer in the Gov position to where he can sabotage everything.

[Antmillennium]

Honestly, looking at it from the other owners' perspectives, why would they buy out Belkin??? It looks like Belkin can no longer stop the majority from doing what they want to do with the team, so it's kind of like he's trapped now. Therefore, I wouldn't offer him anything more than an extreme bargain. I'd probably offer to buy him out for the $25.8 milliion that he already owes. Am I off-base on this or am I missing something??? As it stands right now, I feel like all of the pressure is on Belkin now and the ASG is holding all of the cards. I see no reason for the ASG to offer to buy Belkin out now. Again, am I just not getting something???

[AHF]

I think you have the current position. They may not want Belkin part of things going forward, but to save themselves millions of dollar they are likely happy to have him tag along and get outvoted at meetings.

This would be the position I would take if I was interested in buying out Belkin, though. You maximize your leverage as the ASG but making it clear you are not desparate to get rid of Belkin and are happy to see him pay for cash calls to run the franchises.

[DrReality]

He has made his bed and now he has to lie in it.

The worm has turned . . .