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RAJ Sports alleges it was working with the family who founded Panda Express to buy the Trail Blazers, until the family deceived and ditched the firm to join Tom Dundon’s group—which ultimately won the bid—according to a complaint unsealed Friday.
The firm is asking Delaware’s Court of Chancery to block the Cherng Family Trust from buying a minority stake in the NBA team as part of Dundon’s $4 billion purchase of the team. RAJ Sports said the trust—a family office and investment firm led by Andrew and Peggy Cherng—breached a confidentiality and exclusivity agreement reached over the summer.
RAJ Sports was the lead investor in a separate consortium that sought to buy the Blazers, and Cherng was initially the second-largest investor in that group, according to the complaint and an accompanying brief, both of which are partially redacted.
There are Portland ties for RAJ Sports, which owns the NWSL’s Portland Thorns, the WNBA’s Portland Fire, and a minority stake in the NBA’s Sacramento Kings.
Even after Dundon, who also owns the NHL’s Carolina Hurricanes, agreed to buy the Blazers in August from the estate of Microsoft cofounder Paul Allen, RAJ Sports felt confident it could prevail because the transaction was not finalized and still requires approval by the NBA’s board of governors.
However, on Sept. 12, Dundon entered a formal agreement to buy the Blazers, and as part of that announcement, it was revealed that the Cherngs were among his minority partners.
“While simultaneously professing their shared goal of acquiring the Trail Blazers franchise as part of Plaintiff’s bid, the Cherng Family Trust and the Cherngs intentionally and maliciously interfered with RAJ Sports’ business opportunity by joining Mr. Dundon’s group of investors,” the complaint says.
RAJ Sports was “stunned by this unexpected change of course after months of conversations” in which the Cherngs “pursued and verbally committed to joining” its investor group, the suit says.
The exclusivity agreement features “crystal clear language” prohibiting the Cherngs from joining any rival bid, the suit says. It alleges the family ignored that language to instead take “full advantage of Plaintiff’s information-sharing for months,” before “unilaterally” abandoning RAJ Sports “at the final hour.”
The public version of the complaint came out a few days after the suit was filed under seal Monday.
The Blazers’ outgoing ownership, led by Allen’s sister, Jody, has no involvement in the lawsuit, nor do Dundon, the NBA, and WNBA, according to court documents. The lawsuit does not challenge Dundon’s pending ownership of the team.
RAJ Sports is run by siblings Alex Bhathal and Lisa Bhathal Merage, heirs to their family’s swimwear and investment fortune. In addition to the Kings, Fire, and Thorns, the RAJ portfolio includes minor league baseball team the Sacramento River Cats, Kings-affiliated esports team Kings Guard Gaming, and others.
A proposed temporary restraining order RAJ Sports wants a judge to sign was made public Monday. It seeks to prevent the defendants from entering into any agreement involving the Blazers, including the deal that has already been announced. A hearing on the TRO is expected next month, according to a person familiar with the matter.
Under NBA rules, RAJ Sports would have needed to sell its Kings stake to become even a minority owner in the Blazers.
Other minority owners who are part of Dundon’s group include Sheel Tyle—the cofounder of Portland investment firm Collective Global—and Marc Zahr, co-president of Blue Owl Capital.
The NBA’s board of governors has to approve any final purchase agreement, and the Trail Blazers sale is expected to close by the end of the year. The Blazers are the third NBA team to sell this year so far behind the Celtics in March for $6.1 billion and the Lakers in June for a record $10 billion.
RAJ Sports and the estate of Paul Allen declined to comment. Representatives for the Cherng Family Trust, Dundon, the NBA, and the WNBA all did not immediately respond to requests for comment.
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