Clippers sale hinges on legality of Sterling family trust
Probate hearing on $2B sale to former Microsoft CEO Steve Ballmer is July 7
The $2 billion sale of the Los Angeles Clippers will hinge on the technicalities of family trust law and whether Donald Sterling's estranged wife had the right to unilaterally negotiate a deal with former Microsoft CEO Steve Ballmer.
The July 7 trial will look at the trust's terms alone and not focus on whether the 80-year-old Sterling is mentally incapacitated, Superior Court Judge Michael Levanas said Monday.
Attorneys will argue about whether Shelly Sterling properly followed the terms of the trust in declaring Donald Sterling to be mentally incapacitated.
Shelly Sterling struck a deal to sell the team to Ballmer in May after Donald Sterling's racist remarks to a girlfriend were publicized and the NBA moved to oust him as an owner.
She had two doctors examine her husband and they declared that he was mentally incapacitated and unable to act as an administrator of The Sterling Family Trust, which owns the Clippers. The terms of the trust say incapacitation can be determined by two licensed doctors without ties to the family who are specialists in their field.
In court filings, Donald Sterling's attorneys argued that he submitted to medical examination under false pretenses, and that the examination and letters regarding his mental capacity were defective and incomplete.
The judge said another issue likely to be front and centre during the trial is what happens to a deal that hasn't been closed when a trust is revoked. Donald Sterling revoked the trust on June 9.
Shelly Sterling's attorneys say finishing the deal with Ballmer is part of winding down the trust's affairs. But Donald Sterling's attorneys say the revocation means probate court has no jurisdiction, and winding down affairs refers to passive actions, not a sale that markedly changes the assets in the trust and its value.
Timing has been an issue throughout the proceedings and Levanas did not allow the trial to be postponed as requested by Donald Sterling's attorneys. An expedited timetable was put forward from the beginning because NBA owners must approve the deal and they're schedule to meet July 15 to vote.
That's the same day Ballmer's offer is set to expire — and there is no deal without the judge's determination that a sale was properly done.
If the sale isn't completed by Sept. 15, the league said it could seize the team and put it up for auction.