Schultz sues current owners to undo sale of Sonics

Updated: April 22, 2008, 11:05 PM ET
By Lester Munson | ESPN.com

Charging that the buyers of the Seattle SuperSonics "were willing to lie, and did lie" about their intentions to keep the team in Seattle, former owner Howard Schultz has filed suit in federal district court in Seattle seeking to undo the sale he made in 2006.

The suit comes only four days after NBA owners voted to allow the Sonics to move to Oklahoma City, the home of the group that paid Schultz $350 million for the team.

Munson: E-mail Trail

E-mails regarding the move of the Sonics to Oklahoma City will be key to Howard Schultz's case, writes Lester Munson. Story

• The legal documents: PDF

Schultz and his attorney, Richard Yarmuth, want the court to declare a "constructive trust" on the team that will allow the team to be conveyed to "an honest buyer who desires to keep the Sonics in Seattle."

The suit's accusations of "fraud" and "deception" are based on a series of e-mails written by Clay Bennett, the leader of the Oklahoma City group, and his partners. In one e-mail, written in July of 2006 two days before the sale, Bennett told his partners they could do a "sweet flip" and leave Seattle despite their promises to stay in the market.

The e-mail, and others with similar sentiments, prove that Bennett's group "never intended to own a team that would continue playing in Seattle," the suit asserts.

Arguing that "principles of law and equity do not permit [Bennett and his partners] to continue to own the team that [they] fraudulently obtained," Schultz seeks a judgment that will declare the sale void and turn the team over to a receiver until an "honest buyer" can be found. Microsoft CEO Steve Ballmer and a group of Seattle investors have expressed serious interest in purchasing the team.

In a statement made under oath in the court papers, Schultz says that he "would not have sold the Sonics to the Oklahoma City group if [he] had known at the time that the group's true intention was to move the Sonics to Oklahoma City."

Schultz and his attorney also charge that Bennett made no real effort to build a new arena in Seattle and that he "reluctantly went through the motions to arrange a new arena plan but never wanted or intended that their efforts be successful." Their efforts to obtain financing in the Washington legislature, Schultz charges, were "too late" and too expensive.

Schultz's lawsuit adds to the litigation piling up against Bennett and his partners. The City of Seattle is seeking a court order to force the Sonics to live up to the terms of their lease of Key Arena and play the next to seasons in Seattle. Trial of the lease lawsuit is set for June 16.

Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.

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