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NEWLY RELEASED DOCUMENTS DISPUTE WHO CONTROLS THE HEAT
Published December 19, 1994
An '89 agreement signed by Heat partners Lewis Schaffel, Billy Cunningham, Ted Arison and Zev Buffman called for Arison to have 100% of voting control of the team, according to a front- page piece in today's MIAMI HERALD. Currently, there is a deal on the table from Whit Hudson to buy a controlling interest of the Heat. Hudson is the brother-in-law of Wayne Huizenga. WHAT WAS THE DEAL? The '89 agreement laid out how the original four majority owners would run the team: 100 shares of stock were to be reissued in two classes: voting and nonvoting. Arison was to have 28.34 shares, Cunningham and Buffman 28.33 each, and Schaffel 15. From the agreement: "Since inception, the parties intended that Ted Arison have voting control. ... Ted Arison will own 28.34 shares of the voting common stock, which constitutes 100 percent of the voting control." But the stock was never reissued. Only the original 100 shares exist, and Schaffel and Cunningham, who together now own 60.44 shares, "contend they control the team because they own the most shares." Schaffel said he does not recall signing the '89 agreement. Buffman, who does remember signing: "Lewis and Billy may be in for a big rude awakening." Micky Arison, who is now handling the family's interest in the Heat, said the Arisons will not sue in an attempt to force Schaffel and Cunningham to relinquish control of the team. In an effort to settle things, Micky Arison said he has agreed to sell businessman Hudson control of the team if he buys out Schaffel and Cunningham (MIAMI HERALD, 12/19). THE HUDSON DEAL: According to the report, it was the Arisons that encouraged Hudson to buy out Schaffel and Cunningham for $60M, a deal which included control of the team. As the sale is currently structured, the Arisons would buy out Schaffel and Cunningham, and then sell those shares to Hudson. But "friction" has developed between the Arisons and Hudson over several contract clauses, including who should pay the Arisons' Israeli taxes generated by the short-term purchase from Schaffel and Cunningham. The offer expires January 7 (Alex Marvez, MIAMI HERALD, 12/19).