Timberwolves owner Glen Taylor has had a difficult time letting go of the franchise.
He put the team up for sale so many times over the years without actually completing a sale. One of the hang-ups: He wanted someone to buy a minority stake, operate under his tutelage then complete the purchase of controlling interest later.
Finally, Alex Rodriguez and Marc Lore agreed to Taylor’s terms.
Except their arrangement led to Timberwolves minority owner Meyer Orbach filing a complaint in U.S. District Court in Minneapolis, claiming he was deprived of his right to sell his shares at the reported $1.5 billion valuation.
Lore and Rodriguez are expected to buy the team in installments, first becoming limited partners and then growing their percentage until they assume a controlling stake for the 2023-24 season. The sequencing is expected to include a purchase of 20% of team in 2021, sources said.
Essentially, Orbach’s complaint says that the “tag-along” provision is supposed to be exercised immediately upon the finalizing of Lore’s and Rodriguez’s agreement to buy the team.
According to the complaint, “When Orbit (Orbach’s company) attempted to exercise its tag-along rights, Taylor not only ignored Orbit but also privately stated — contrary to his public statements — that he’s not proposing to enter into a “control sale” with Rodriguez and Lore at this time. Instead, Taylor is claiming that any “control sale” will be years in the future, and therefore Orbit currently does not have any tag-along rights.”
The complaint continues: “Taylor is wrong. Although the deal with Rodriguez and Lore was structured in a clumsy attempt to circumvent Orbit’s tag along rights, it does not deprive Orbit of its tag-along rights. … The tag-along rights are triggered regardless of whether control is transferred “in a single transaction or a series of related transactions,” according to the Timberwolves partnership agreement.
The complaint filed by Orbach, a New Jersey real estate mogul who owns more than 17% of the Timberwolves and WNBA Lynx, also includes a significant revelation: Despite Taylor’s public statements to the contrary, he has included no provision in the $1.5 billion sales agreement with Lore and Rodriguez that requires the new ownership group to keep the franchise in Minnesota upon taking control of the team, according to an exhibit in the complaint.
A provision requiring Rodriguez and Lore to keep the team in Minnesota would have been difficult to enforce, anyway.
Does that excuse Taylor publicly claiming the final agreement would include such a provision? No. He should be held accountable if he weren’t truthful.
But in terms of whether the team actually moves, the difference is probably negligible.
Without seeing the exact terms of Timberwolves partnership agreement, it’s impossible to say whether Orbach’s complaint is valid. At minimum, this complicates the sale.
Even if the sale goes through as agreed upon, a couple years of Taylor and Rodriguez and Lore dividing power could be uneasy.
The Timberwolves aren’t getting a clean break from Taylor. The only question is how messy it will get.
