Is ownership of the Timberwolves and Lynx about to change hands?
That question will receive an answer soon from Eric C. Tostrud, U.S. district court judge for the state of Minnesota, after he heard arguments from lawyers representing franchise majority owner Glen Taylor and minority owner Meyer Orbach during an injunction hearing on Wednesday in St. Paul.
Orbach is asking the judge to stop a sale of 20% of Taylor's ownership shares to Marc Lore and Alex Rodriguez, or have the court hold all funds from the sale. Orbach believes that his partnership agreement with Taylor, who also owns the Star Tribune, has been violated because he is not being allowed to sell his shares before Taylor transfers ownership.
The crux of the issue, outside of the changing of hands of hundreds of millions of dollars, is whether the equity interest purchase agreement [EIPA] that Taylor signed with Lore and Rodriguez is the first step in the eventual sale of the franchise for $1.5 billion or if all that is happening right now is the sale of Taylor's 20%.
Arguments for Orbach were primarily handled by Paul Schafhauser who said there is no way to look at the EIPA — which includes a schedule for the transfer of majority ownership to Lore and Rodriguez through various call options over the next four years — and not conclude that Taylor is selling the two franchises.
"The series of related transactions speaks volumes," Schaufhauser said.
Meanwhile Alain Baudry, who handled arguments for Taylor, said that until the transfer of ownership is contractually completed — specifically via the call option on a second tranche of shares in 2023 that would give Lore and Rodriguez majority control — no sale has been completed.
Baudry added that if no sale is being completed it is impossible for Orbach, a limited partner with no control over Taylor's decision making as general partner, to have his rights violated.
