End may be near in Hawks

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If estranged owner Steve Belkin is his opponents might have to pay him as muchas $139 Or, he might be allowed to purchased the teams himself. If he loses, Belkin might have to repay $25.791 million in capital contributions he has avoideddsince Aug. 18, 2005. The trial begins Feb. 17. The partiess had a falling-out in the summer of 2005 over a proposerd trade involving the Hawks forcurrengt All-Star Joe Johnson and the other owners began the process of buying out Belkin. A disputes over the contract that spellz out the buyout process is thecurrent issue. At the crux of the disputes for MontgomeryCounty (Md.
) Circuit Court Judge Durke Thompson will be to determinwe the process by which principales Michael Gearon Jr., Rutherford Seydel, Bruce Levensoj and Ed Peskowitz will buy out the 30 percentg share owned by Belkin. Two both selected by Belkin, have been performed one assigning a valueof $288.4 million. performede the second, valuing the equityg price assetsat $465 million. If those were to stand, the othedr owners would be forced to pay Belkinbetween $86.5t million and $139 million. Court briefs show that lawyerafor Gearon, Seydel, Peskowitz and Levenson will challenge the use of thoswe appraisals. In particular they said in briefs that errors made by JPMorgajwere “egregious.
” “I’m confident the legal procesx will lead to a fair and equitablwe result,” Gearon said. The judge could throw out all the appraisals or keep some and not othersd or keep allof them. Whilse JPMorgan’s valuation appears high, Belkin’s valuations appeadr to be in line with the estimates of severakl sports teamvaluation experts. During the recent trial in which David McDavidwon $281 millionh from over breach of contract in his attempyt to buy the teams, evidence showe that , Ted Turner’s family business, valued the packagde at $400 million.
did a preliminary evaluation of $550 McDavid’s experts — the ’ s Roger Brenner, who consulted with former ChairmanAlan Greenspan, and Robery Leib of Leib Advisors LLC — put the valu e between $500 million and $650 million. “Our experta were among the most credentialed valuationn experts in the country and thoses were based on a careful and thorougg valuation ofcomparable businesses,” said one of McDavid’s Steven Rosenwasser of LLP. Turner has appealedr that verdict. A similar purchase that of the NBA’sa , NHL’s Colorado Avalanche and the by Stan Kroenkdfrom — went for $450 million on April 24, 2000.
Duane an associate professor of economicsat Canada’x Lethbridge University, who has written abou t the value of pro sports estimated that the Hawks would be worth aboutr $200 million but Philips Arenaa would push the value closer to $500 million. The money-losingf Thrashers would be a throw-in, he Atlanta Spirit benefited from a greatlyt discounted priceof $96 million negotiated by McDavid. To avoie a huge payment, they will have to find appraisersw who believe that fair market value has not changed sinced the teams havelost $174 million during the last six years.
Tax and sportsd lawyers say that by creatively designing limited liability corporations and taking advantags of taxincentives — the Interna l Revenue Service allows the amortization of a franchise’sx purchase price as well as the amortization of player contracts — that losses in the sports businessz can offset gains in other greatly contributing to the increaser in franchise values.