Timberwolves Investor Files Complaint Alleging Glen Taylor Violated Partnership Agreement In Sale
MINNEAPOLIS (WCCO) -- The Minnesota Timberwolves' second biggest investor behind Glen Taylor -- a real estate mogul named Meyer Orbach -- filed a legal complaint Wednesday alleging that the sale of the team to former baseball star Alex Rodriguez and e-commerce billionaire Marc Lore violates the franchises partnership agreement.
Orbach wants to be bought out at the time of the sale. WCCO's Mike Max has been told Taylor will remain a major investor for two years, which is when minority investors could be bought out.
Max has also been told Taylor wants to stay on so employees have a better chance to keep jobs, and it's advantageous to the sale so the new owners don't have to come up with as much cash.
On Thursday morning, Taylor issued a statement about the reports:
"I am aware of the story ... and the litigation that has been filed. As a policy, we do not comment on pending legal matters. I stand by my prior statements and commitment to keeping the Timberwolves and Lynx in Minnesota."
Taylor told WCCO Radio the team will not move. It is not yet known whether that provision is part of the sale, which also includes the Minnesota Lynx.
The 80-year-old Taylor purchased the Timberwolves in 1994 for $88 million to keep them from moving to New Orleans. He told reporters when the negotiations with Lore and Rodriguez began that the franchise remaining in Minnesota was a condition of the sale.
"There was no use talking to them if they didn't agree to that," Taylor said in an April 10 interview with The Associated Press.
Orbach is the front man for Orbit Sports, which filed the lawsuit Wednesday in U.S. District Court in Minneapolis that was first reported by ESPN. The defendants are listed as Taylor, his investment company for the sports teams, and the Taylor Corp., the printing and creative services business based in North Mankato, Minnesota, that he built into a multibillion-dollar conglomerate.
Orbach, whose share of the clubs is larger than all of Taylor's other minority investors combined, first bought in to the Timberwolves and Lynx in 2016. Orbach was given "tag-along rights," which entitle minority partners to sell their stake in the event of a transfer of controlling ownership.
According to the complaint, Orbach's tag-along rights were triggered by the sale agreement, but Taylor has denied them. The plaintiff wrote that the deal with Lore and Rodriguez was "structured as a clumsy attempt to circumvent" the tag-along rights.
"Taylor not only ignored Orbit but also privately stated – directly contrary to his public statements – that he is 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," the lawsuit said.
The complaint also accuses Taylor of misleading public statements about the contractual requirement that Lore and Rodriguez keep the Timberwolves in Minnesota. According to the language in the deal, the plaintiff wrote, the issue of relocating the team must be presented to an advisory board that cannot actually stop the new general partner from moving.
