More information on Timberwolves structure was revealed in the legal dispute between majority owner Glen Taylor and minority owner Meyer Orbach. Orbach's suit over when he would get to liquidate his shares of the franchise in the prospective sale to Alex Rodriguez and Marc Lore also showed how the sale to Lore and Rodriguez will proceed.
Lawsuit gives window into Timberwolves ownership structure
Minority owner suing to get his money from sale now.
June 16, 2021 at 5:03PM
Through court filings, here's some of was revealed:
• The exact breakdown of who owns what percentage of the Wolves was outlined. Taylor and his associated groups own slightly more than 69%. Other ownership and their shares, down to many decimal points, are also outlined in documents, including the estate of Flip Saunders, which has less than 0.3% of the franchise. Orbach and his Orbit Sports company own about 16.3%.
• Orbach is asking for a payout of $300 million for his share, which he says he is entitled to now as part of his "tag-along" rights, which he claims entitle him to sell his shares now that an agreement is in place to sell a controlling ownership of the team to Rodriguez and Lore. Taylor responded that Orbach doesn't have that right and can instead sell his assets when Rodriguez and Lore actually assume a controlling ownership of the team, which is slated to happen before the end of 2023. Having an agreement in place is different from actually executing the transactions, in Taylor's eyes.
• Along those lines, Taylor's response lays out the timeline for Rodriguez and Lore to assume this control. They will come in at 20% this year, then technically have the option to acquire another 20% before the end of 2022, a sale known in the documents as the "first tranche option." Then another 20% before the end of 2023, a transaction that gets the label "second tranche option." It's at this point that Taylor said he will exercise the so-called "drag-along rights" and force other partners to sell their stakes on the same financial terms as Taylor. This is where Orbach would get his money, according to Taylor's response. Orbach would like the option to get that money now.
• Rodriguez and Lore will have a "third tranche option" to buy another 20% of the franchise before the end of 2024.
Naz Reid led the Wolves with 25 points off the bench, Anthony Edwards added 21, and Minnesota made sure Charlotte didn’t leave Target Center with another victory.
