Anyone familiar with high-profile court cases, especially civil cases, knows two things are happening at once: a fight in the court through legal filings and the process, and a fight for the hearts and minds of the public who care about the trial.
That second part is why, when the attorney for Suns’ minority owners Andy Kohlberg and Scott Seldin filed his latest brief with the court Monday — a response to Ishbia’s countersuit to the duo’s original lawsuit against him — a press release was sent to the media along with it. In the filing, Kohlberg and Seldin accuse Ishbia of mismanaging the NBA franchise and of using a capital call to pressure them to sell some or all of their shares in the franchise. They also insist that Ishbia and his legal team made a mistake that allows them to purchase a majority of the team and take over as the governor.
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“We have now filed our claims for fraud, breach of fiduciary duty, and breach of contract to expose the misconduct by Mr. Ishbia,” said the duo’s lawyer, Michael Carlinsky, Global Co-Managing Partner and Head of Complex Litigation, Quinn Emanuel Urquhart & Sullivan LLP, said in a statement sent to NBC Sports. “Among other things, we believe the evidence will show that Mr. Ishbia contrived a scheme to threaten our clients with massive dilution of their interests in the Suns if they failed to fund a capital call within ten days’ notice, while at the same hiding his own failure to fund by the deadline. We believe this scheme backfired and will result in a substantial reduction of Mr. Ishbia’s interest in the Suns. He has repeatedly abused his position as manager of the franchise to benefit himself — not the Suns. We look forward to moving forward on an expedited basis and presenting our case to the court.”
The legal filing itself states (via Doug Haller and Mike Vorkunov of The Athletic):
“The reality is that Ishbia is using the Suns as his personal piggy bank, including through a lengthy list of conflicted transactions — only some of which the Minority Owners are aware of.”
Among the accusations the filing makes are that Ishbia made a loan to the Suns at an interest rate considerably higher than the prevailing market rate, and that he sold the naming rights to the Suns’ arena to his own mortgage company, among other things.
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Ishbia has pushed back from the start. A spokesperson for Ishbia released this statement to The Athletic.
“This isn’t a lawsuit; it’s a shameless shakedown dressed up as legal process,” a spokesperson for Ishbia said. “From day one, Mat Ishbia was transparent that he was going to do things differently. Contrary to how the team was previously managed, Mat made it very clear he would invest significantly into the Suns and Mercury. He told all the investors that they could step up with him or sell their stake and step aside. Kohlberg and Seldin stayed in and now they’re trying to freeload off the value Mat created.
“Kohlberg and Seldin want to drag the organization backward, and they openly admit in this filing that investing in the team and its fans ‘makes no business sense.’ They are advocating neglect. They are free to sell their shares in the open market and if they don’t, they should be prepared to lose this lawsuit and participate in Mat’s continued investments in the teams and community.”
There was speculation at the time the initial lawsuit by Kohlberg and Seldin that it was just a ploy to gain leverage in talks for Ishbia to buy their shares. The Athletic story basically confirms this, saying Kohlberg went to Ishbia a year ago to buy him out, but Ishbia didn’t respond and a few days later scheduled the capital call, which in the eyes of Kohlberg was seen as trying to squeeze him and dillute the value of his shares. Ishbia, obviously, denies this. All of that led to this charge from the lawsuit, again by The Athletic.
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[Kohlberg and Seldin] later learned that more of the capital had not been funded and that Ishbia had used a debt-to-equity conversion to fill the financial gap. This maneuver, Kohlberg and Seldin say, was not the legitimate way to do that. The two minority owners also say that a July 8, 2025, capital call was also not fully funded on time. They argue that under the team’s operating agreement, they would be afforded to buy the shares Ishbia had not funded himself. If they did, they would then have a majority stake in the franchises.
This feels like it will ultimately be settled, Ishbia will buy out Kohlberg and Seldin, but first there is a this legal battle and a lot of lawyers making a lot of money.
Read the full article here
