Glen Taylor, majority owner of the Timberwolves and owner of the Star Tribune Media Co., is being sued by former Wolves coach and General Manager Kevin McHale in a dispute over control of a Minnesota hearing-device company called Envoy Medical.
In a lawsuit filed in Ramsey County District Court on Jan. 29, McHale and a group of investors including the company's former CEO accuse Taylor of "self-dealing" following a series of business deals that gave Taylor control of Envoy. Taylor and current Envoy Medical CEO Brent Lucas, who is also a defendant in the lawsuit, deny the allegations.
The crux of the alleged scheme is that Taylor issued unpayable loans to Envoy, and secretly gained control over a majority of the privately held company by having it issue preferred shares to him. Taylor effectively paid $20 million to acquire a company once valued at more than $1 billion, the lawsuit claims.
Taylor and Lucas said Monday that the lawsuit is without merit. "I deny these allegations," Taylor said. "The Envoy board will defend themselves vigorously, and we are confident that we will prevail. Envoy Medical remains dedicated to [the] patients who have our devices."
Former Envoy CEO Patrick Spearman is the lead plaintiff in the case, along with McHale, former Envoy President Rochelle Amann and seven other investors.
McHale is a Hibbing native, former University of Minnesota standout and Basketball Hall of Fame player with the Boston Celtics. After retiring in 1993, he began his post-playing career with the Wolves as a TV analyst and special assistant, eventually serving more than a decade as the organization's vice president of basketball operations. He also had stints as the Wolves head coach in 2004-2005 and again in 2008-2009 before leaving the organization for good in mid-2009.
"Kevin McHale, who encouraged other investors to put their money into Envoy Medical, feels the need to be part of this lawsuit because of the numerous small shareholders that are being harmed," a Jan. 30 news release on the lawsuit said.
Current Envoy CEO Lucas said in an e-mail Monday that the company was "disappointed" by the lawsuit, but stands behind its past decisions: "The company strongly disagrees with the allegations in the complaint, and believes that the claims are meritless and will ultimately be dismissed."