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, the companies belonging to Andrew Kohlberg and Scott Seldin — 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.
This suit appears to be, at least in part, an effort to gain leverage in talks for Ishbia to buy out these minority owners, something supported by a letter obtained by NBC Sports from the attorneys for Ishbia’s Suns to the attorneys for the minority owners. “Your clients have no right to insist that ISH Suns acquire their interest at all, much less at the valuation and premium they are demanding,” the letter states. It goes on to say the Suns do not have an issue with the two groups selling their shares to outside groups, but that the Suns LLC will not buy them out at a higher valuation than the team was purchased for.
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.