Two minority owners of the Phoenix Suns have sued the team and its controlling owner Mat Ishbia, demanding to see records in order to investigate the status of the team\u2019s business and financial condition.<\/p>\n
According to a redacted copy of the lawsuit that was filed last week in Delaware Court and obtained by The Associated Press, Kisco WC Sports II, LLC, and Kent Circle Investments, LLC, allege that Ishbia and Suns Capital Group are depriving other members of ownership with basic information about the management of the team.<\/p>\n
\u201cOur clients sued to obtain records to which they are entitled as minority owners of the Suns,\u201d Michael Carlinsky, a co-managing partner of Quinn Emanuel Urquhart & Sullivan and attorney for the plaintiffs, said in a statement. \u201cThey are concerned by the manager\u2019s approach towards minority owners, and want more information about certain spending and capital raises in which the manager has engaged. Transparency with minority owners is not optional, and our clients think it is critical to the success of the Suns.\u201d<\/p>\n
In the lawsuit, the plaintiffs say they\u2019re making their demand for records in search of information that could reveal possible breaches of the partnership agreement, mismanagement of the company and conflicts of interests.<\/p>\n
The plaintiffs also cite a belief that Ishbia may have \u201centered into multiple undisclosed side deals with other investor members\u201d on things including the funding of the team\u2019s practice facility.<\/p>\n
The Suns declined to comment.<\/p>\n
Earlier this week, attorneys representing Ishbia sent a letter to the attorneys representing the two minority owners. The letter was obtained by The Associated Press.<\/p>\n
The letter says that Andrew Kohlberg and Scott Seldin are seeking $825 million for their share of the team, which would put the valuation of the franchise around $6 billion. That would be about a 60% increase from the time the franchise was purchased in 2022.<\/p>\n
Ishbia, a mortgage executive, bought a majority stake<\/a> of the Phoenix Suns and Phoenix Mercury from the embattled owner Robert Sarver for $4 billion<\/a>. Ishbia and his brother Justin said then that they would be acquiring more than 50% of the franchises, which includes the entirety of Sarver\u2019s share as well as some holdings from minority partners.<\/p>\n The sale was officially approved in February 2023. Kohlberg and Seldin were the only two minority owners who did not sell their shares when Ishbia purchased the team.<\/p>\n \u201cKohlberg and Seldin chose not to sell, and instead decided to remain limited partners knowing full well that ISH Suns intended to invest heavily,\u201d the letter states. \u201cYour clients should be thrilled with that decision and the performance of their investment.\u201d<\/p>\n The letter goes on to state that Ishbia \u201cdoes not intend to reduce or slow its investments in the Company and its teams. To the contrary, ISH Suns will continue doing whatever it takes to position the Suns and Mercury to win championships, ensure a positive team culture, create a lasting impact on the greater Phoenix community, and improve the fan experience.\u201d<\/p>\n Last week\u2019s lawsuit marked the latest in a string of multiple legal actions against the Suns and Mercury.<\/p>\n Last month, the Suns confirmed it fired Gene Traylor<\/a>, a former security manager who filed a lawsuit against the team in May alleging discrimination, harassment and unlawful retaliation. The team said at the time that Traylor was terminated after an outside investigation found he\u2019d violated company policies regarding confidential information.<\/p>\n Earlier in July, former Mercury interim coach Nikki Blue filed a lawsuit against the organization<\/a>, alleging unequal treatment based on race and gender, unequal pay based on race and that her employment was terminated in retaliation for complaints about unequal treatment.<\/p>\n