Suit Claims Cuban Wrongfully Diverted Money To Cover Mavericks

Cuban Accused Of Obtaining More Than $29M In Unauthorized Loans

Hillwood Center Partners (HCP) last week filed a lawsuit in state district court in Dallas accusing Mavericks Owner Mark Cuban of “wrongfully diverting millions of dollars” from American Airlines Center to “help make up for cash shortfalls incurred by the team," according to Danny Robbins of the AP. The suit claims that Cuban "covered the Mavericks' financial shortfalls by obtaining" more than $29M in "unauthorized loans through a limited partnership designed to distribute profits from the arena." It also accuses the Mavericks of "breach of contract, breach of fiduciary duty and unjust enrichment." HCP is controlled by former Mavericks Owner Ross Perot Jr., and Cuban in an e-mail said that he "believes Perot is 'trying to find nickels in the sofa cushion' in an attempt to recapture losses stemming from the Victory project, the retail and office development surrounding the arena." HCP still owns a "small interest in the arena's limited partnership," Radical Arena, and Cuban said, "I have to tell you that the biggest mistake I made in buying the Mavs was in not completely buying out (Perot's) interest." The suit claims that Cuban, acting as Radical Arena General Partner, "caused the partnership to make multiple loans to the Mavericks instead of distributing the funds within the corporation." HCP spokesperson Eddie Reeves said that the company "tried unsuccessfully to resolve its issue with Cuban before filing the lawsuit" (AP, 7/20). HCP said that it has "demanded that the money be distributed to the partners and Cuban has refused." The suit alleges that the Mavericks in total have borrowed about $50M from Radical Arena and "other Mavericks-related entities involved" in Center Operating Co., which is jointly controlled by the Mavericks and Stars. Cuban confirmed that Stars and MLB Rangers Owner Tom Hicks is "not involved in this dispute" (DALLAS MORNING NEWS, 7/21).