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NBA Wants to be a Party, woohoo!

Not that kind of party; a party to the lawsuit between Howard Schultz and Bennett (PBC).

The NBA has asked to intervene in a Seattle federal lawsuit to help prevent coffee mogul Howard Schultz's former Seattle SuperSonics' ownership group from voiding the sale of the team to its current Oklahoma owners.

If the judge does undo the sale, the NBA says it has a legal interest in making sure any new owner is "qualified in all respects to operate an NBA team and has the ability to provide for the long-term financial stability and efficient operation of the Sonics."

The Schultz group's requests to void the sale "are fundamentally inconsistent with the most basic rules and regulations governing the operations of the NBA and its member teams, which do not authorize or permit ownership transfers without the express approval of the NBA," the league said in its request for intervention.

The NBA contends the Schultz group is barred from trying to void the sale by a release and indemnification agreement the group signed in exchange for the NBA's approval of the group's sale of the team to a group of Oklahoma owners headed by Clay Bennett.

Because of the release, "former owners are prevented from taking future legal action that could disrupt the efficient management and operation of the league and each of its member teams," the NBA told a federal judge.

The Schultz group sold the team to Bennett's group for $350 million in July 2006. This year, the Schultz group filed a federal lawsuit in an attempt to void the sale, contending Bennett's group fraudulently represented that it wanted to keep the team in Seattle when its real desire was to move the franchise to Oklahoma City.

The team is currently in the process of moving to Oklahoma City after settling another federal lawsuit filed by the city of Seattle. That settlement allowed the team's Oklahoma owners to buy their way out of the remaining two years of a Seattle arena lease.

"The financial success or failure of the business of the NBA is vitally affected and substantially determined by the success or failure of each individual team," the NBA said in its intervention request. "The NBA Constitution, which binds all NBA owners and member teams, makes clear that the NBA Commissioner and NBA Board of Governors have the sole and exclusive authority to approve or disapprove any proposed transfer of an ownership interest in an NBA team.

In its lawsuit, the Schultz group is asking a federal judge to cancel the sale and appoint a receiver to operate and manage the team until the team can be transferred to "an honest buyer who desires to keep the team in Seattle."

In the NBA's intervention request, it said that the league's constitution contains a provision that if a receiver is appointed for any team, the NBA's board of governors has the right to cause the team "to be placed under the management and control of the commissioner."

"The purpose of these provisions is, of course, to ensure that NBA teams are, at all times, operated only by persons that have been found by the NBA board of governors to be fully qualified to manage and direct a professional basketball team in accordance with NBA rules and regulations," the league said. "Enforcing and safeguarding the provisions of its own Constitution are plainly protectable interests and entitle the NBA to intervene."
"news" OK, reporting.

Party on Plastic!