ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Thursday, June 5, 2008

Supersonic Contract Dispute

Seattle












This is Seattle.  A nice place for a basketball team.  Or so thought former Seattle Supersonics owner, Howard Schultz.

Oklahoma_city_1890_3 This is Oklahoma City, home of the new owners of the team, including the group's chairman, Clay Bennett.  A bit retro, but still nice.

But Howard Schultz is not pleased, and according to Seattlepi.com, he is suing the Bennett group for (among other things), you guessed it! - breach of contract.  Schultz argues that the new owners violated the contract by failing to make a good faith attempt to keep the team in Seattle.  According to Schultz's attorney, the sale of the team was negotiated on condition that the Bennett's group negotiate or propose "a reasonable arena plan, instead [of] proposing an arena substantially exceeding the team's needs and requiring unprecedented amounts in public subsidies."

According to the Seattle Times, the Schultz suit seeks to unwind the sale transaction based on fraud, misrepresentation and breach of contract.  Key evidence in the suit turned up in the form of e-mails exchanged among the Oklahoma City partners suggesting that they had intended to move the team to Oklahoma City all along.

The City of Seattle is also suing the Bennett group, seeking to force the team to play in Seattle until the end of its lease with the city's KeyArena.  The Bennett group has offered to pay the remaining rent on the facility but that may not be enough to placate the city.

[Jeremy Telman]

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