Access to Documents Triggers Lawsuit Between NBA Team’s Owners

When a conflict exists among owners of a business, access to accurate information is critical. The shareholder or partner with a majority stake or control over daily operations might unlawfully leverage their power in order to prevent others from reviewing critical data. When this occurs, minority owners’ efforts to obtain the information they seek can be a highly contentious and costly prelude to the underlying dispute.

Battles over access to documents can occur in any type of company, from small businesses owned by two family members to large, multinational corporations. One high-profile dispute involving a professional basketball team is now playing out in a Delaware court. Kisco WC Sports and Kent Circle Investments have sued Mat Ishbia, controlling owner of the Phoenix Suns, alleging they’ve been denied the ability to key information about the franchise.

Upon purchasing the Suns for approximately $4 billion, reports say Ishbia wanted to serve as sole owner, and offered to buy out all 16 of the team’s minority owners. Fourteen agreed, but the two plaintiffs did not. Now, they claim that Ishbia is running the team as if they do not have ownership rights. One accusation involves Ishbia’s purported refusal to share fundamental financial data with them on major team decisions, such as the move to build a new practice facility. 

As in Florida, Delaware law provides minority owners with statutory inspection rights to financial records. However, specific sources of information could be subject to a company’s ownership or operating agreement. When a business is being formed or a new investor signs on, there is often a spirit of cooperation and optimism that leads partners and shareholders to overlook procedural matters relating to document access that could be crucial down the road. This one of the reasons why skillful counsel is so important. 

A plaintiff seeking access to information may seek an order compelling production of requested information, authorizing a court-appointed examiner or forensic accountant, or granting injunctive relief prohibiting further related transactions pending inspection. If a majority owner has breached their fiduciary duty or the ownership agreement to the detriment of minority owners, damages could be awarded. 

Whether the business at issue is an NBA team or not, transparency among owners is a legal mandate. Should you be engaged in a conflict over sought-after documents or another type of business owner dispute, knowledgeable legal counsel is necessary to assert your rights effectively.

Clay Parker, Esq. The Florida Lawyer represents clients throughout the state in a full range of partnership and shareholder disputes. Located in Orlando, our firm has extensive track record of success in these complex matter. For an appointment to discuss your particular circumstances, please call [ln::phone] or contact us online.