Clippers Sale Sealed by Novel Tactic
Loeb & Loeb LLP partner Adam Streisand has represented some of the most famous interests and estates including Michael Jackson, Marlon Brando, William Randolph Hearst and Michael Crichton. However, Streisand’s most rewarding case was representing Steve Ballmer in the Microsoft co-founder’s $2 billion sale of the Los Angeles Clippers, which was finalized last Tuesday. “It was certainly the most gratifying case I’ve done. One, because Steve Ballmer is going to be such a wonderful owner of an NBA team, but also because I felt strongly about the circumstances that got us to this point. I think former owner Donald Sterling’s conduct is outrageous and utterly unacceptable and it meant a lot to be involved in his ouster.”
After months of court battles, the Clippers sale occurred because of a legal scheme involving a seldom invoked legal clause of California’s probate code. Streisand used the clause 1310(b) to move the deal forward despite an appeal from Sterling, which would normally freeze the transaction. “1310(b) is almost never invoked because it deprives a person of their appellate rights, so we had to show irreparable harm to the estate. In these circumstances, given the consequences of Donald trying to keep control of the team, I thought we had a shot.” The clause essentially allows for the financial assets of the state in question, the Clippers, to be dealt with by a trustee designated by the court without any consideration to an appeal in order to prevent irreversible loss to the estate.
According to UC Davis School of Law Professor David Horton, specializing in intricacies of wills and trusts, using 1310(b) was a novel tactic. “It’s the first time I’ve ever heard of it. I think that’s one of the things that underscores how extraordinary the case is.”
See Henry Meier, Loeb & Loeb Lawyer Relies on Rare Legal Maneuver to Seal Clippers Sale, Los Angeles Daily Journal, Aug. 13, 2014.
Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.