Former Hawks owners sue insurance company over Danny Ferry buyout

AP Photo/David Tulis

The Hawks reached a buyout with Danny Ferry last year following his season-long leave of absence for racist comments about Luol Deng.

Why did those former Hawks owners pay off the general manager?

1. It cleared the way to sell the team (with one former owner reportedly earning more because of Ferry’s comments).

2. They thought someone else would pay.

Chris Vivlamore of The Atlanta Journal-Constitution:

The Atlanta Hawks Basketball and Entertainment LLC, the former ownership group of the NBA franchise, has filed a lawsuit against New Hampshire Insurance Company for breach of contract involving the settlement of claims made by former general manager Danny Ferry.

AHBE claims it was insured under a policy for coverage for certain losses related to employment practices, including, but not limited to, certain acts of “Wrongful Termination”’ and “Workplace Torts.” According to court documents, AHBE gave notice to AIG on April 2, 2015 that claims had been asserted by Ferry that it believed were covered.

According to the lawsuit: “Despite an obligation to pay and the acknowledgement that certain of Mr. Ferry’s claims triggered the AIG Policy, as well as the fact that these claims clearly fell within the policy coverage, AIG has failed and refused to pay the covered loss without significant justification and in bad faith. AIG had no reasonable basis to contend that a claim had not been made and that such claim was not covered.”

This lawsuit does not include current Hawks owner Tony Ressler. So, it probably won’t affect the franchise.

But it could expose more details of the Ferry saga beyond an absurd investigation that found no evidence Ferry was motivated by racial bias in his comments on Deng.

Ferry said, “He’s a good guy overall, but he’s got some African in him, and I don’t say that in a bad way other than he’s a guy that may be making side deals behind you, if that makes sense. He has a storefront out front that’s beautiful and great, but he may be selling some counterfeit stuff behind you.” Ferry was not reading verbatim a scouting report. He never stopped to correct him or apologize for slipping over the line. Those words became his own.

To say Ferry wasn’t motivated by racial bias when using a player’s African heritage as a reason not to pay him relies on a harmfully narrow definition of racial bias.

Discovery probably isn’t the place to resolve that greater issue, but it can reveal details the Hawks and Ferry might not want known – which is why this likely ends with a settlement.