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Probate Court next forum for fight over ownership of Los Angeles Clippers

If she gains control of the family trust, Shelly Sterling would have to act in the best interest of all the beneficiaries of the trust, including Donald Sterling, and the selling price of the LA Clippers would need to be fair market value or above.

The Probate Court in Los Angeles will hold a trial next month on Shelly Sterling’s proposal to sell the Los Angeles Clippers for $2 billion.

Her husband, Donald, who three doctors say is mentally incapacitated, opposes the sale and his attorneys may try to block the transaction during the four-day Probate Court trial which will start on July 7, news reports said.

Meanwhile, the news reports cite court documents that say Donald Sterling has early signs of Alzheimer's or another form of brain disease.

Donald Sterling and Shelly Sterling are co-trustees of the Clippers under a family trust. Under California law, a trustee is declared incompetent if two doctors deem the person mentally incompetent.

“That person is no longer a trustee,” Attorney Mary Gillick, who trained as a nurse and then went to law school, explained in a statement to InsideCounsel.

Under the terms of the trust, Shelly Sterling would likely be allowed to make decisions about the team alone – if her husband is no longer deemed competent.

“She can operate the trust by herself,” Gillick, who practices trust and estate litigation in California at McKenna Long & Aldridge, and is a fellow of the American College of Trust and Estate Counsel, told InsideCounsel. “She’s got fiduciary duties.”

Jeremiah J. Moffit, another trust and estate litigation specialist at the law firm, adds that Shelly Sterling would still have to act in the best interest of all the beneficiaries, including Donald Sterling. The sale price of the LA Clippers would need to be fair market value or above, he adds. Neither of the two attorneys is involved in the Sterling case.

But getting $2 billion for the team, sounds like a “good deal,” Gillick said. The trust also has control over 150 valuable real estate holdings.

Yet, the attorneys representing Donald Sterling may try to prove the doctors are not disinterested, Shelly Sterling did not comply with the terms of the trust and is breaking her fiduciary duties, and that Donald Sterling still has sufficient capacity to remain a trustee, according to the two attorneys from McKenna Long & Aldridge. His side may try to stop his removal as a trustee, and block the sale of the team, as well.

In addition, Moffitt said Donald Sterling’s attorneys could even try to revoke the entire trust arrangement via the Probate Court. One other option is that Steve Ballmer, the former Microsoft CEO who negotiated the sale with Shelly Sterling, could become uncomfortable and may back out of the purchase, or a temporary trustee could be appointed by the probate court.

Looking at the big picture, the two attorneys said there have been increasingly more legal fights involving relatives over trusts in California. It used to put stepparents up against children of a deceased spouse, but now siblings are fighting amongst each other or with their older parents, Gillick said. Often, it becomes financial elder abuse. “It’s vicious,” she adds.

When it comes to this case, Donald Sterling recently called the National Basketball Association "despicable monsters" and "a band of hypocrites and bullies." The NBA has imposed a $2.5 million fine on Donald Sterling, banned him from the NBA for life, and could force him to sell the team in response to a racist rant that was later released by TMZ.

Donald Sterling now opposes the sale of the Clippers, and only approved letting his estranged wife “to negotiate with a buyer, not to formally sell the team,” CNN reported, based on comments from Donald Sterling’s attorney.

"Bottom line, Donald Sterling does not want to sell the team," Bobby Samini told CNN.

In addition, CNN reported that Meril S. Platzer, a California neurologist, examined Donald Sterling on May 19 and found he "is suffering from cognitive impairment secondary to primary dementia Alzheimer's disease," court papers said. In addition, a PET scan on May 16 showed findings "consistent with a neurodementia of the Alzheimer's type," Platzer added. Donald Sterling could not spell "world" backward, did not know it was spring, and found it hard to draw a clock, Platzer said.

In addition, James Edward Spar, a geriatric psychiatrist, said Donald Sterling suffers "mild global cognitive impairment" and "the overall picture is consistent with early Alzheimer's disease, but could reflect other forms of brain disease," court papers said. In addition, Spar said Donald Sterling "is substantially unable to manage his finances and resist fraud and undue influence, and is no longer competent to act as trustee of his trust," court documents said. Also, Stephen L. Read, a geriatric psychiatrist, "confirmed the methodology and conclusions of Drs. Platzer and Spar," court papers said.

But Maxwell Blecher, an attorney representing Donald Sterling, told CNN his client is mentally sound. "It strikes me as totally incredible to argue that this man -- I talk to him every day -- is incapable of making decisions and is mentally incompetent," Blecher said on Tuesday. "And I don't believe any court is going to make a finding to the contrary."

It was also recently reported that Donald Sterling's lawyers have hired four private investigation firms. ESPN.com reports they will “dig up ‘dirt’ on the NBA's former and current commissioners and its 29 other owners.”

 

Further reading:

LA Clippers likely to be sold as Donald Sterling’s future role in team is unclear

NBA players support Silver’s ‘Sterling’ decision, but litigation may follow

Alleged racist comments attributed to Donald Sterling widely condemned

 

 

 

Contributing Author

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Ed Silverstein

Ed Silverstein is a veteran writer and editor for magazines, websites and newspapers. A graduate of Harvard's Kennedy School of Government, he has won several...

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