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Suns owner Mat Ishbia countersued two minority owners Tuesday.
The pair of minority owners had accused him of mismanagement and lack of transparency; Ishbia responded that the pair are manufacturing a “contrived legal drama” to try to force him to buy their stakes at inflated terms.
The countersuit from Suns Legacy Holdings LLC—the corporate entity through which Ishbia owns majority stakes in the Suns and WNBA’s Mercury—targets Kisco WC Sports II and Kent Circle Investments, which jointly sued in August for greater access to team financial records. Kisco is led by Andrew Kohlberg, a former professional tennis player who now runs a senior living business and has been a limited partner in the Suns since 2004, while Kent Circle is led by Scott Seldin, who has an Arizona-based real estate business.
Ishbia’s filing reframes their “books and records” case as a bad-faith effort to avoid a recent capital call requesting additional money from limited partners and force an above-market buyout. He says he informed all minority owners of the planned capital call last year, and that each investor “had the opportunity, but not the obligation,” to participate. His complaint was filed in Delaware’s Court of Chancery, the same court in which Kisco and Kent Circle sued Ishbia.
Ishbia bought a reported 57% stake in the Suns and Mercury from Robert Sarver at a $4 billion valuation in 2023. Since then, he has poured additional resources into the teams, he says in his countersuit, including through “bold trades,” the development of a practice facility for the Mercury, and efforts focused on fans—such as introducing a $2 value menu for both NBA and WNBA home games and reaching a new local media-rights agreement to broadcast games for free for at least the next two seasons.
Suns spokesperson Stacey Mitch told Front Office Sports that Ishbia has been clear with minority owners from the start that he would continue to put money into the teams as needed, and that when he took over, each investor had the choice to sell or stay in and invest alongside him.
“Andy Kohlberg and Scott Seldin want it both ways,” Mitch said. “They don’t want to invest in the teams, but they are demanding a payday significantly higher than what Mat originally offered, which was still over 20x their original investment. That’s not how it works, and we’re confident we’ll prevail in court.”
Kohlberg and Seldin, through Kisco and Kent Circle, also alleged that Ishbia may have cut undisclosed side deals with other partners tied to the capital call—which would be in violation of a clause in the LLC agreement stating all members must be treated equally, according to their suit. The relevant portions of the agreement are cited in the suit but heavily redacted. Ishbia’s suit is also heavily redacted.
Ishbia’s lawsuit seeks to “resolve with finality defendants’ attempt to leverage their manufactured claims for commercial gain,” a “prompt declaration” that the capital call was aboveboard, and any additional relief as deemed appropriate by the court.
Michael Carlinsky of law firm Quinn Emanuel, counsel for Kohlberg and Seldin said in an emailed statement to FOS that “Mr. Ishbia’s so called ‘declaratory judgment lawsuit’ is nothing more than a thinly-disguised effort to thwart our clients’ books and records litigation through delay; it doesn’t actually ‘sue’ anyone. That said, we intend to add our full set of counterclaims for damages arising out of Mr. Ishbia’s gross mismanagement and dereliction of duties and will obtain the evidence that he has been fighting to keep from us.”
