When Mat Ishbia purchased a controlling interest in the Phoenix Suns, he offered to buy out any of the team’s 16 minority owners (using the $4 billion valuation of the team to set the price). Fourteen of those owners took him up on the offer.
The two that did not — Kisco WC Sports and Kent Circle Investments – have taken the Suns to court in Delaware over frustrations about transparency and access to information, NBC Sports has confirmed.
“Our clients sued to obtain records to which they are entitled as minority owners of the Suns,” said attorneys Michael Carlinsky and Michael Barlow of Quinn Emanuel, who are representing the minority owners. “They are concerned by the manager’s [Ishbia’s] 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.”
In the court papers, Kisco and Kent Circle claim they have not had access to view basic information about the franchise, including how it has been run and some of the investments that Ishbia and the Suns have made, such as a new practice facility. With that, the minority owners don’t believe they have an understanding of what their shares are worth. They are asking the court to allow them to investigate what they perceive as potential violations of the limited liability company agreement, as well as conflicts of interest.
There are somewhat conflicting reports that one or both of the minority owners are looking to sell their shares and get out (it is known that Kisco and Ishbia discussed a buyout at one point). If true, this suit could be in part an effort to gain leverage in those talks. Suns Capital Group LLC sent a letter to the minority owners stating that it does not have a problem with the two groups selling their shares to outside groups, but the owners cannot demand that Ishbia and the Suns LLC buy them out at a higher valuation than the team was purchased for, reports Gerald Bourguet of PHNX Sports.
For Suns fans, this will have no impact on the court or on how the fans experience their favorite team. For fans with questions about Ishbia’s ownership, it’s simply something to note for now.
