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Failure To Follow NBA Procedure Could Cost Sacramento Group

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(Sacramento, CA)
Friday, March 29, 2013

In documents filed March 27, Flemmer -the trustee of Bob Cook's shares- states that no one besides Seattle investor Chris Hansen has gone through the three-week approval process required by the National Basketball Association to bid on the shares. 

According to court papers, "The Trustee had received only one serious offer for the LP Interests and the Trustee understood no other interested purchasers had even submitted an application to the NBA for pre-qualification and had received no firm indication from any other interested party that was in position to and intended to submit a qualified bid by the bid deadline."

The Trustee announced Wednesday he and Hansen had agreed to a $15.1 million price.  Hansen's group also has an agreement to buy controlling interest of the Kings from the Maloof family and has filed a request to move the team to Seattle.

Michael P. Malloy with McGeorge Law School says the judge in the case will usually follow the recommendations of the trustee.  "A better price from an out-riding group coming in at this last moment could be a material consideration -might lead to change, but it's not a guaranteed shot by any means," he said.

The deadline to bid on the shares once owned by Bob Cook is April 1st.  Sacramento Mayor Kevin Johnson said Wednesday he was aware of Hansen's bid and that his group would counter Hansen's offer.

Malloy says the likelihood of a trustee and a judge accepting a late offer could depend on how simple it is. "If it's $20 million and we're talking cash money on the table, no strings?  I think the bankruptcy trustee would have a hard time maintaining consensus of the creditor committees around any lower price."

Johnson's office and an attorney for the Mayor's group "Think Big Sacramento"  have both refused to comment on the failure to follow NBA procedures.  

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