Marc Lore and Alex Rodriguez's purchase of the Timberwolves hit a speed bump as Meyer Orbach, the second largest shareholder, filed a complaint.
Marc Lore and Alex Rodriguez's purchase of the Timberwolves from owner Glen Taylor hit a speed bump as Meyer Orbach, the second largest shareholder of the franchise, filed a complaint in U.S. District Court.
According to a copy of the complaint obtained by ESPN, Orbach is alleging that the purchase violates the franchise's partnership agreement. It cites Taylor's failure to honor "tag-along rights" for the minority investors. Their rights allow them to sell their interests before Taylor, according to the document.
"When Orbit [Orbach's company] attempted to exercise its tag-along rights, Taylor not only ignored Orbit but also privately stated—contrary to his public statements—that he's not proposing to enter into a 'control sale' with Rodriguez and Lore at this time," the complaint said. "Instead, Taylor is claiming that any 'control sale' will be years in the future, and therefore Orbit currently does not have any tag-along rights."
Lore and Rodriguez are still waiting for a vote of the NBA governors for final approval of the sale. The two are expected to be equal, 50-50 partners, and will sign the paperwork for the deal reportedly worth $1.5 billion in the coming days.
The current plan is for them to purchase the team in installments, beginning with limited partners before gaining a controlling stake in the 2023-24 season. The sales agreement is expected to be completed by July 1.
Additionally, Orbach, a New Jersey real estate mogul who owns more than 17% of the Timberwolves and WNBA Lynx, revealed a key piece of information in the complaint. There is reportedly no provision in the sale agreement that requires the new ownership group to keep the franchise in the state.
There's a clause reportedly listed under "Governance Matters" that lists several actions which would require the new owners to "present to the Advisory Board for discussion." Included is any plan to "relocate the team outside of the Twin Cities market."
According to the complaint, the agreement states that the "Advisory Board is advisory only ... and no action ... requires the approval, in any form, by the Advisory Board to be effective."
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