SBD/July 22, 2014/Franchises

Sterling Meets With Ballmer As CFO Says Family Needs Clippers Sale To Cover Debts

Shelly (l) and (r) Donald Sterling discussed the sale for three hours on Sunday
Banned Clippers Owner Donald Sterling yesterday met with prospective owner Steve Ballmer for the "first time since he began a nearly two-month battle to block his wife from selling" the team, according to James Rainey of the L.A. TIMES. Whether the 1 1/2 hour "afternoon session at Sterling's Beverly Hills mansion signals a possible breakthrough is unclear." Lawyers for Donald and Shelly Sterling are "scheduled to return to court" today. The meeting between Donald Sterling and Ballmer "came hours after court had adjourned for the day." Although the get-together was "described as cordial, none of the participants or others familiar with the talks said any substantive progress had been made." But sources said that the fact that Sterling "would meet Ballmer offered some hope for a settlement." The two have "not scheduled any additional meetings." Closing arguments are set for Monday (L.A. TIMES, 7/22). ESPN L.A.'s Ramona Shelburne cited sources as saying that the meeting was "arranged Sunday night following a three-hour meeting earlier in the day between Donald and Shelly." Donald Sterling had "been preparing to file a new suit in state court on Monday morning before he and his wife spoke at length Sunday night at Donald's house" (ESPNLA.com, 7/21). In L.A., Jack Wang notes the trial will resume today at 4:30pm ET, with Clippers interim CEO Dick Parsons "to take the stand." Bank of America's Anwar Zakkour, who "helped negotiate the sale of the team, is scheduled to testify as well" (L.A. DAILY NEWS, 7/22).

DEBT COLLECTION: USA TODAY's David Leon Moore notes only "one witness took the stand" yesterday, Sterling Family CFO Darren Schield, who "manages the day-to-day affairs of Donald and Shelly Sterling's multibillion-dollar real estate empire." Schield testified that when Donald Sterling "revoked the Sterling Family Trust on June 9, a move Donald hoped would block the sale, he triggered a process that could result in a default of nearly" $500M the Sterlings owe to three banks. Schield said that the "only way to pay off the loans would be to sell a major portion of the Sterlings' property" (USA TODAY, 7/22). Schield said that the family trust's "dissolution could trigger a default" on its $250M credit line with Bank of America. He added that if the loan "couldn't be repaid out of the proceeds from selling the Clippers, it would likely be renegotiated at a much higher interest rate" (WSJ.com, 7/21). Schield said that if Sterling "has to dump" $500M worth of apartment buildings "he could destabilize the Los Angeles real estate market" (AP, 7/21).
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