Darren Schield, overseer of the finances of The Sterling Family Trust, said that Los Angeles Clippers’ owner Donald Sterling may be required to close a deal for some of his estate empire to pay loans because he keeps refusing to sell the franchise. Three banks are ready to recall their loans, testified Schield on Monday, as long as Sterling decided to dissolve the trust. According to Maxwell Blecher, Sterling’s attorney, the Clippers owner could raise funds taking the company public. On the other hand, Pierce O’Donnell, lawyer of Shelly Sterling, Donald’s ex-wife, doubts the decision. After all, Donald Sterling’s reputation, for him, is not favorable.
On April the franchise owner was banned for life by the National Basketball Association (NBA) due to racist statements. Sterling denied he is a racist after the release of recorded conversations. Schield also agree with O’Donnell. He does not know if anyone would be a partner of Sterling after the controversy.
The polemic was not the first by Sterling. He was sued twice for housing discrimination, but everything came public after the recording of the owner talking to V. Stiviano, his ex-girlfriend. NBA commissioner Adam Silver banned Sterling for life and fined him $2.5 million. This is the maximum amount allowed by the league. The decision was supported by other NBA owners and players, Clippers included.
Asked by O’Donnell if the company has $500 million to pay off the loans, Schield answered, “no.” The real estate market of Los Angeles could be destabilized if Sterling has to dump $500 million worth of apartment buildings, said the man who oversees the trust’s finances.
The banks would be reluctant to give money to the trust if Sterling’s loans go into default. Schield is afraid.“I know the bank looks at this as a higher credit risk with all this going on.”
In order to pay the loans, Los Angeles Clippers’ franchise owner Sterling met Steve Ballmer also on Monday to “conclude” the sell. The former Microsoft CEO is one of prospective buyers of the California-based team.
Nothing was resolved after a 90-minute meeting at Sterling’s house in Beverly Hills. The owner rejected Ballmer’s $2 billion for the team. Sterling bought the franchise in 1981 for $12.5 million and nowadays, according to Forbes magazine, is worth $575 million. The head of Tulane University’s sport law program Gabe Feldman estimated the team may “worth around $1 billion.”
The meeting between Ballmer and Sterling happened hours after a quick court session. Sterling’s attorneys just planned, but call no witnesses. The lawyers’ argument is that the owner dissolved the family trust on June 9.
Estranged since December 2012, Shelly Sterling has co-ownership rights and, by herself, tried to sell the Clippers to Ballmer. On June 11 she went to court seeking approval of the $2 billion deal. The judge could not sanction the sale.
Adam Streisand, lawyer of Steve Ballmer, believes the judge will rule in favor of Shelly. To pay the loans and stabilize the finances again, Donald Sterling requires to sell the Los Angeles Clippers franchise, even against his will. The NBA can seize the team and negotiate it at auction if they do not sign a contract until Sept. 15.
Commentary By Murillo Moret