Pushing his claim that the Sacramento Kings' limited partners might have a right to match a Seattle group's purchase offer for the team, a bankruptcy trustee has persuaded the Maloofs to cough up confidential documents on the pending sale.
Following lengthy negotiations, the Maloofs turned over documents last Friday concerning the sale of their 65 percent share of the team, trustee David Flemmer's lawyer told a bankruptcy judge Monday.
Flemmer's lawyer, Don Fitzgerald, said an "outline" of the Seattle deal will be made available on a confidential basis to qualified bidders interested in buying bankrupt limited partner Bob Cook's 7 percent share. Flemmer is auctioning the share to pay Cook's creditors.
The Cook auction has become a potentially major issue in the fight between Sacramento and Seattle for the Kings.
Fitzgerald and Flemmer maintain that limited partners might have the right to counter the Seattle group's offer, although they've yet to push a legal claim in court.
"We are concerned" that the partners' legal rights are being ignored, Fitzgerald told U.S. Bankruptcy Judge Christopher Klein.
If he's right, it would make Cook's share dramatically more valuable – and could create a major obstacle to the Maloofs' attempt to sell their controlling interest to hedge fund manager Chris Hansen's group. Hansen plans to move the team to Seattle next season.
Financiers Ron Burkle and Mark Mastrov are assembling a counteroffer to keep the team in Sacramento. While their offer would be presented directly to the NBA, they could get a leg up on Hansen simply by purchasing the 7 percent share at the bankruptcy auction.
If the bankruptcy judge agrees with the trustee's assertion, Burkle and Mastrov could invoke their limited partner rights and buy out the Maloofs.
Just the fact that the Seattle deal is being challenged in a Sacramento bankruptcy court could confuse matters and so hurt Hansen's ability to get his purchase approved by the NBA. The league's board of governors, consisting of team owners, is expected to rule in April on the Seattle purchase.
It is possible, however, that the Maloofs or Hansen could succeed in buying Cook's share of the team in the bankruptcy auction. That would strengthen Hansen's efforts to complete his acquisition of the Kings.
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