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Boston Globe article on Stern's decision


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Stern OKs removal of Belkin

By Shira Springer, Globe Staff | August 12, 2005

NBA commissioner David Stern submitted an affidavit yesterday that approved the removal of Boston-based businessman Steven Belkin as NBA governor of the Atlanta Hawks. The affidavit was filed in response to a request by the ownership group Atlanta Spirit after Massachusetts Superior Court Judge Allan van Gestel granted Belkin a preliminary injunction and the right to remain as governor Tuesday. At that time, van Gestel concluded that approval by the commissioner was a precondition of any removal.

Since the Hawks' owners in opposition to Belkin now have prior approval from Stern, they will attempt to install Atlanta-based owner Michael Gearon Jr. as NBA governor. In the affidavit, Stern also approved Gearon as the replacement governor. The defendants in the case filed a motion yesterday to dissolve the preliminary injunction. Briefs will be submitted this morning. The owners in opposition to Belkin want the matter to proceed as expeditiously as possible, hoping van Gestel will reverse his decision this afternoon. The Hawks' Board of Managers has scheduled a teleconference for later this afternoon, which could represent the first opportunity to replace Belkin with Gearon.

''I'm very heartened by the commissioner's action strongly supporting our position to remove Steve Belkin as governor and approve Michael Gearon as our new governor," said Washington-based Hawks owner Bruce Levenson. ''It's in the judge's hands now. Despite Steve Belkin's opposition, every owner and our entire basketball staff supports GM Billy Knight in his efforts to put together an exciting young team that will capture the hearts of our fans. Joe Johnson is the next important piece of that plan."

As soon as the Hawks install a new governor, they plan to finalize a sign-and-trade with the Suns to acquire Johnson in exchange for two first-round picks and Boris Diaw. While the majority of the ownership and basketball operations staff favored the deal, Belkin opposed it. In accordance with his authority as the Hawks' NBA governor, Belkin would not approve the transaction. Belkin believed Atlanta was giving up too many assets to get Johnson. While other past disputes divided Belkin from his co-owners, including the allotment of All-Star tickets, it was the disagreement about the Johnson trade that precipitated the legal action.

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.

''On August 1, 2005, Mr. Belkin acted to block the trade of Joe Johnson by directing the NBA [through a letter sent by outside counsel] not to proceed with a trade call between the Hawks and the Phoenix Suns that, if held, would have consummated the trade for Mr. Johnson previously negotiated by the Hawks' General Manager and approved by the Hawks' Board of Managers. Mr. Belkin's action, which . . . was binding on the team, barred the Hawks and the Suns from completing the trade."

From the text of the Stern affidavit, it was clear the commissioner wanted to preserve the authority of general managers or those invested with the power to pursue and arrange trades (Danny Ainge is called the Celtics' executive director of basketball operations). While the Hawks' situation is unique, Stern apparently believed the league could not afford to allow the legal system to set a precedent where an NBA governor had the right to block a deal desired by the majority of co-owners and team's basketball staff. The commissioner thought both agreeing to or blocking a trade constituted a legally binding action.

In the wake of the Stern affidavit, Levenson reiterated his belief that the only tenable resolution to the whole situation would be a divorce where Belkin is bought out or vice versa. Belkin and his representation declined to comment last night.

I sure hope the decision comes down today and hopefully we can have another press conference soon and finally the devil himself out of the Atlanta Hawks organization and have Mr. Joe Johnson wearing a Hawks uniform.

MY question is, Can Van Gestel still reject Stern's approval? and if he does, wouldnt something smell a bit too fishy, even though it already does?

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To be honest, I don't think this judge is biased, I think he is just an idiot. I think if he were biased, he would have judged in Belkin's favor. Instead, he basically said "I don't know if this trade is good or not (even though that was irrelevant), so let's let David Stern decide what should happen". I would think that after refusing to rule and telling them to take it to Stern, he would have to go with what Stern suggests.

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I'm not sure this is an issue for NBA lawyers. No one is questioning what the role of the governor is per the NBA. The question is if Belkin violated the agreement he made with the other owners. This is why Stern specifically mentioned that not entering into a legally binding agreement violated the terms just as much as entering into one. Those are the terms of Atlanta Spirit LLC not the NBA.

If Belkin had 100% ownership he would not be in violation of the role of NBA governor. He is in violation of the agreement with the other owners of Atlanta Spirit LLC.

If the judge does not allow Belkin to be removed, I'm not sure what the other owners will do next.

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The way I am looking at it, is that the Stern ruling was just another step in the process, it gives me hope that the NBA is backing the decision by the other 8 owners....now of course if this judge indeed is a buddy of Belkin, then I still see Belkin staying as the Governor of the NBA. Now the 8 owners can still fight this and if Stern wants to get involved, because he wants to do the right thing, then he will. But all this rest on the hands of that judge even though he did say that the 8 owners needed the NBA's approval.

We should all cross our fingers for the next couple of days, even though this thing might get resolved later on the day.

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Quote:


If Belkin had 100% ownership he would not be in violation of the role of NBA governor. He is in violation of the agreement with the other owners of Atlanta Spirit LLC.


If that is your hypothetical (Belkin has 100% ownership) he would not be in violation of the Atlanta Spirit LLC agreement either.

In reality, he is in violation of both the NBA contract and the Atlanta Spirit partnership documents. (1) He is in violation of the NBA documents because they allow him to be removed as governor if he takes an action to bind the team in opposition to the majority of the ownership. Stern is arguing he has done this by blocking the trade, and I think that is the most common sense reading of the contract. (2) He is in violation of the Atlanta Spirit contract because it says that the ownership acts by vote with 1 vote to the Atlanta group; the Washington group and Belkin (Boston). The JJ trade was two votes to one in favor of trade and he is trying to block that in violation of the agreement.

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Quote:


(1) He is in violation of the NBA documents because they allow him to be removed as governor if he takes an action to bind the team in opposition to the majority of the ownership. Stern is arguing he has done this by blocking the trade, and I think that is the most common sense reading of the contract.


I'm pretty sure the Atlanta Spirit LLC agreement is the one that sets the terms for removing their NBA governor, and the NBA does not set the terms by which a team can remove their NBA governor.

I understand what your saying, but I believe Stern was commenting on the terms of the Atlanta Spirit partnership and not the rules of the NBA.

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^^^ I think you're right, but if he is sure that the judge is wrong in letting Belkin void the trade, the nba lawyers will still step in one way or another. He will not let a judge make a wrong (illegal) decision if its consequence is one that seriously hurts the NBA's interest (leaving Belkin in power)

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