Did Family Trust Allow Shelly Sterling to Sell the LA Clippers? Court to Decide That Issue in Upcoming Trial.

The fate of the Los Angeles Clippers has been unsure ever since the owner, Donald Sterling, made headlines with some racist remarks he made that were recorded and released to the media. On the tape, Sterling is heard deriding his girlfriend, V. Stiviano, for having her pitcture taken with black people and saying that he did not want them brought to Clippers games.

Although Sterling has asked forgiveness for what he said, claiming that they were nothing more than emotional remarks made in the heat of a “lovers’ quarrel”, the public has been unforgiving. The NBA responded by banning Sterling from the association for life, a move which was followed by Sterling filing a lawsuit against the NBA for allegedly violating his civil rights.

Since the incident, Sterling’s estranged wife, Shelly Sterling, has entered into negotiations to sell the Clippers to a less controversial owner. She has agreed to sell the team for $2 billion to Steve Ballmer, the CEO of Microsoft, but the question remains whether Shelly has the authority to sell the team. Initially, the dispute centered around the questionable mental state of the 80-year-old Donald. Two doctors examined Donald and found him to be mentally incapacitated.

Donald’s attorneys tried to get the lawsuit to focus on whether Donald was induced into undergoing the examinations without being told what they were regarding. They also asked for more time before the beginning of the trial so they could get a doctor to declare Donald mentally sound. The judge denied those requests. Shelly Sterling and Steve Ballmer are pushing for a quick resolution to the trial, saying that the judge needs to make a ruling on the issue by July 15 so that the NBA can consider the proposed sale.

Shelly allegedly had the authority to sell the team under the terms of a family trust, but Donald revoked that trust on June 9th. Now Shelly is insisting that her husband’s weakened mental state gives her authority over the team. She and her attorneys also contend that Donald wrote a letter on May 22, which gave her the authority to sell the team. Donald’s attorneys argue that the letter merely gave her the authority to negotiate certain issues of the sale.

Judge Michael Levanas, of the Los Angeles Superior Court, recently announced that he would not exclude Ballmer from the trial. This was despite the objections of Donald’s attorneys, who argued that Ballmer is not a “bona fide purchaser” of the team. Instead, he is merely a prospective buyer, and as such, he has no direct stake in the proceedings. “He has nothing to do with the internal affairs of a trust”, said Gary Ruttenberg, one of the attorneys representing Donald in the legal dispute.

Despite Shelly’s contention that the fact of her husband’s mental incapacitation granted her the authority to sell the basketball team, the court has recently announced that Donald’s mental state will not be a central issue in the trial. Instead, the court has decided that it will focus on whether the family trust gave Shelly the authority to sell the team. Super Lawyers named Illinois business trial attorney Peter Lubin a Super Lawyer in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Chicago business trial lawyers have over a quarter of a century of experience in litigating complex shareholder disputes for closely held family and other closely held businesses. We handle emergency business law suits involving injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact one of our business attorneys by calling our toll free number at 630-333-0333 or online here.

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