08.11.14

Lawsuit : Wang Used Sterling’s Windfall As Leverage

Posted in Hockey, The Marketplace at 8:05 pm by

Philly hedge-fund manager Andrew Barroway’s NYC ICE has sued New York Islanders owner Charles Wang (right) over the latter reneging on an agreement to sell the NHL franchise for $420 million. According to the suit, reported on by the New York Daily News’ Barbara Ross and Patrick Leonard, Wang seemed to think recent events surrounding the NBA’s Los Angeles Clippers had inflated the Islanders’ market value :

In papers filed in Manhattan Supreme Court, Barroway’s corporation blames Wang’s “about-face” on a whimsical case of “seller’s remorse” directly influenced by the “unrelated news” of former Microsoft CEO Steve Ballmer’s $2 billion bid to buy the NBA’s Clippers from Donald Sterling, the team’s embattled, soon-to-be-former owner.

NY ICE’s lawsuit claims the parties “shook their hands on an agreement” and NY ICE started to line up NHL approval and financing for the $450 million price agreed upon in March. However, Wang “without notice, abruptly refused to proceed to close the transaction and honor the terms of their 70-page purchase agreement and instead “improperly sought to renegotiate the already agreed upon price.”

Beginning with an in-person meeting in New York on June 10, the lawsuit alleges Wang made his first of several references giving “thanks to Steve Ballmer.” Then the suit states that in a July 16 meeting, again in New York, Wang “blind-sided Barroway by demanding $548 million” to buy the Islanders.

“Wang, whose greed was further stoked by the Ballmer bid, … set on a course of bad faith conduct to improperly renege on the agreement and eventually blind-side NY ICE with a substantially-increased price demand,” the lawsuit states.

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