Sterling Probate Trial

Everything you need to know about the Donald Sterling Decision

sterling6-smallSuperior Court Judge Michael Levanas presided over the Probate hearing at the Los Angeles Superior Court in Downtown LA to determine whether the $2 Billion sale of the LA Clippers to former Microsoft CEO Steve Ballmer can go through.

Judge Levanas decided three specific issues at the trial, and Shelly Sterling had to prevail on all three issues in order to finalize the sale.

Issue 1: Did Shelly properly remove Donald from the trust? Was there fraud in making this determination?

Holding: Shelly properly hired two qualified doctors not related by blood or marriage to examine Donald Sterling. Drs. James Spar and Meril Sue Platzer examined Donald Sterling with his consent, and they filed certifications that he was not capable of serving as trustee. She followed the proper procedure under the express terms of the trust. Lavanas also determined that there was no fraud involved in the doctors reaching their conclusions and no “Secret Plan B” which was Donald’s attorneys’ assertion that Shelly colluded with the doctors and her attorneys to strip him of the Clippers under false pretenses.

Issue 2: Did the revocation of the trust destroy the power of Shelly to sell the team to Steve Ballmer?

Holding: Donald argued that when he revoked the trust following the signing of the Binding Term Sheet between Shelly and Steve Ballmer he thereby revoked her authority to sell the team. Lavanas held that following the revocation of the trust Shelly properly had the authority to “wind down the affairs of the trust” which included finalizing the sale of the team.

Issue 3: Should the court grant an order under Probate Code § 1310(b) permitting the sale of the Clippers to Ballmer before the conclusion of any appeals in order to preserve the value of the Clippers asset?

Holding: This was the closest issue for Lavanas to decide. A 1310(b) order is an emergency measure only used in rare circumstances where a delay in making a final determination will cause an asset of the trust to depreciate significantly in value. Lavanas granted the 1310(b) holding that the sale should go through to prevent a significant depreciation Clippers asset. He stated that the testimony of Clippers interim CEO Richard Parsons and Bank of America investment banker Anwar Zakkour were extremely credible. Parsons testified that the Clippers faced a “Death Spiral” if Donald Sterling continued to own the team as Coach Doc Rivers, players, sponsors, and then ultimately ticket holders would boycott or defect from the team. Zakkour testified that the Ballmer deal was beyond their wildest expectations and they would bu highly unlikely to get another offer in the $2 Billion range of sold at auction.

At the conclusion of his lengthy ruling, Levanas envisioned what might happen if Donald Sterling remained the owner. Citing testimony of Clippers interim CEO Richard Parsons, he said the team would go into a “death spiral.” Sponsors would withdraw, players would quit and coach Doc Rivers would leave. “The Clippers would suffer a massive loss of value if the team survived at all,” Levanas said.

What Happens Next:

The sale can go forward regardless of any appeals, Levanas said.

Monday’s tentative oral decision is just that, a tentative decision. The final written decision is expected to be handed down in about 10 days. However, according to Ballmer attorney Adam Streisand the sale will move forward quickly.

And Donald Sterling will appeal, his attorneys said.

“[Donald’s] reaction is very calm. He didn’t see this as the final battleground. This is one stage of a long war,” Bobby Samini said.

According to Max Blecher, Donald’s team has to now ask the California Court of appeals for a Writ to permit them to take up a normal appeal. That is their next step.

Donald Sterling also has two other lawsuits pending, one in Federal court against the NBA for antitrust violations with damages initially estimated at $1 Billion (which he said in testimony would be $9 Billion) and one in State court against the NBA, Commissioner Adam Silver, Shelly Sterling, and the Clippers.

However, the NBA was happy with the decision Monday. “We are pleased that the court has affirmed Shelly Sterling’s right to sell the Los Angeles Clippers to Steve Ballmer,” the NBA said through spokesman Mike Bass. “We look forward to the transaction closing as soon as possible.”

Pierce O’Donnell, an attorney for Shelly Sterling, said they hoped to have the sale completed by August 13, after the final judgment is entered.

The final deadline for the deal with Steve Ballmer, already extended for a month, was August 15.

League Commissioner Adam Silver said if the team wasn’t sold by September 15 the NBA would seize the team and auction it off.

The NBA regular season begins in late October.

Witness Testimony:

Judge Lavanas determined that Shelly Sterling’s witnesses were all highly credible and that Donald Sterling’s witnesses, namely himself and Dean Bonham were not credible. He stated specifically that he gave no weight to Bonham’s testimony whatsoever. Here is a recap of their testimony:

Dr. James Spar – A geriatric psychiatry expert that examined Dr. Sterling and determined the Billionaire didn’t have the requisite capacity to preside over the trust. His qualifications were unassailable. He is one of the leaders of his field, a Professor at UCLA, and he actually wrote sections of the Probate Code that were at issue in this case. Not too shabby.

Dr. Meril Sue Platzer – A neurologist hired by Shelly Sterling to evaluate Donald Sterling in order to determine his capacity under the terms of the trust. Dr. Platzer testified that Donald Sterling likely has Alzheimer’s and that her diagnosis was based on imaging tests of his brain and a two-hour interview at his home in Beverly Hills on May 19 with Shelly and an attorney present. Dr. Platzer said she wasn’t told initially that her evaluation was in connection with the Clippers sale. Donald accused her of being drunk during the examination, although Judge Levanas unequivocally rejected this claim deemed it not credible.

Richard Parsons – A titan of industry and extremely well respected business man who was former chairman of Citigroup and CEO of Time Warner and is the current interim CEO of the Clippers. He testified that Doc Rivers and several players have told him they will not play for the team with Sterling as owner and that the sponsors were “waiting by the side of the pool” before committing to re-up their sponsorship agreements. He believed based on his communcations with sponsors that if Donald Sterling remained owner they would not renew their agreements, causing significant financial harm to the team. He called the situation a “DEATH SPIRAL” where if Donald remained owner the sponsors, players, coach, and ultimately fans would all defect or boycott and team’s value would plummet.

Anwar Zakkour – Bank of America’s co-head of technology and media investment. Zakkour testified that Ballmer’s sale price was 12 times the team’s revenue, an unheard of ratio. The Milwaukee Bucks were the most recent NBA team sold, just weeks before Zakkour’s financial team did their analysis, and they sold for only 4 times revenue. Zakkour valued the team between 1 Billion and 1.3 Billion, and at the most aggressive levels possible on every metric the team was valued at between 1.5 Billion and 1.8 Billion. He also testified that there was a perfect storm with the shortened time frame for the sale which created a higher sales price, one they could not hope to replicate in a forced sale of the team by the NBA. In referring to the Ballmer deal he used terms like slam dunk, home-run, and Nirvana.

Dean Bonham – Donald Sterling’s valuation expert. Lavanas determined that he was extremely not credible, his testimony was entirely speculative, and therefore the court gave his testimony no weight. On cross-examination it was revealed that Bonham had no college degree and didn’t even have a high school diploma! He had no formal training or education in accounting and lied on the stand about his credentials. On direct examination Bonham testified that he was president of the Denver Nuggets in 1990, but on cross-examination he admitted he was only the president of marketing for the team. He was brought on as a witness because of his knowledge of the Dodgers $2.15 Billion sale where he participated as a consultant.

Dr. Cummings – An expert in the field of mental health examinations as it relates to capacity. His credentials are excellent, he is at the forefront of his field, however he was not able show that Drs. Spar and Platzer acted inappropriately by any standards. He even admitted that he wouldn’t have told Donald the reason for the exam was to determine his capacity under the trust because it would have added more stress and influenced the results.


There was an army of attorneys that participated in this case but only a handful that spoke. The following are the primary trial attorneys.

Donald Sterling Attorneys:

Max Blecher
Bobby Samini
Gary Ruttenberg
Stephanie Cutler
Shelly Sterling Attorneys:
Pearce O’Donnell
Adam Streisand (Steve Ballmer’s attorney)
Bert Fields

RYAN KERNS, ESQ. – Wild About Trial

Copyright 2014 Wild About Trial. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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