The great thing about Mark Cuban is that the fun doesn’t end when the NBA season does. A great philosopher — I think it was Spider-Man — once said that with great power comes great responsibility. Also plenty of litigation, apparently. Cuban no sooner extricated himself from one legal entanglement on Friday, than he got caught up in another.
And this time, Cuban is being sued by a company owned by H. Ross Perot, Jr., son of former Presidential candidate and noted screwball H. Ross Perot. Which is always fun. Cuban is accused of diverting millions of dollars from the Mavericks’ arena, American Airlines Center, to make up for team financial shortfalls.
From the ASSOCIATED PRESS:
Hillwood Center Partners filed the lawsuit last week in state district court in Dallas. The company is controlled by the team’s former owner, Ross Perot Jr. The Associated Press obtained a copy of the lawsuit Monday.
The lawsuit claims Cuban has covered significant cash shortfalls for the Mavericks by obtaining more than $29 million in unauthorized loans through a limited partnership.
Cuban declined comment in an e-mail to the AP.
A spokesman for Perot did not immediately respond to a request for comment.
Last week Cuban scored a rare win over the SEC, when a U.S. District judge dismissed charges against him of insider trading involving shares of MOMMA.COM. The most entertaining aspect of which being, in my opinion, his brother Brian’s infamous “My Brother Is Not Martha Stewart” post on his blog, THE CUBAN REVOLUTION.
Perot Jr. handed over majority ownership of the Mavericks to Cuban in January of 2000 for $285 million, but still holds a minority interest in the team. Perot has always been first and foremost a real estate guy, and it’s been said that the only reason he took control of the Mavericks in the first place was to develop Victory Park, a $3 billion residential and commercial development on land surrounding the Mavericks’ arena. But Perot’s group, Hillwood Center Partners, recently transferred ownership of the Victory Park buildings to a German investment group, although Hillwood will continue managing the properties.
So this new deal may be the reason Perot is demanding a strict accounting of what’s going on financially with of one of the largest tenants, the American Airlines Center. I’m sure Cuban will have something to say about it soon. Watch this space.
According to USA TODAY, the Dallas law firm that filed the lawsuit on behalf of Hillwood, Figari & Davenport, is the same one that represented former Mavericks coach Don Nelson in his ongoing battle with Cuban to collect more than $7 million in deferred compensation.
7:38 am on July 21st, 2009
Here is the reply of Cuban to the lawsuit:
“I can only offer my opinion, which is that Ross Perot Jr must be desperate from the losses he has suffered from VIctory and his hedge funds. My lawyers have been open with our minority partners, and in Mr Perot’s case, very minority, about the loans to the Mavericks. The loans have been used to put the best possible Mavericks team on the court, which in turn created the NBA’s longest sellout streak and drove business to the AAC/COC, and to Perot’s Victory development. As best I could tell, he was very happy to take advantage of the traffic when he had an economic interest in Victory to do so. Unfortunately for Mr Perot, he was apparently unable to capitalize on the benefit and is trying to find nickels in the sofa cushion.
It is my understanding that Mr Perot has received legal notice of the loans since they began, right after the Mavs appearance in the Finals as we tried to improve the team further. Only he knows why he has chosen to file a lawsuit and to make it public. The unfortunate reality is that this is the nature of our business relationship with Mr Perot. From all i can tell, he could care less if the Mavs ever win a game. I have to tell you that the biggest mistake I made in buying the Mavs was in not completely buying out his interest.”