A pair of Suns minority shareholders – Kisco WC Sports and Kent Circle Investments – have sued the team in a Delaware Chancery Court, reports Michael McCann of Sportico. The minority owners say in their complaint that they’re “dissatisfied” with the way Suns Capital Group LLC (Mat Ishbia‘s group) has managed the team.
As McCann details, Kisco and Kent Circle claim they haven’t been allowed to view records and financial information that would help them understand how the franchise is being run and how much their shares are worth. They’re demanding a court order that would allow them to look into alleged “potential breaches of a limited liability company agreement, mismanagement of the team and conflicts of interest,” McCainn writes.
According to Gerald Bourguet of PHNX Sports, when Ishbia took over as the Suns’ controlling owner in 2023, he gave the team’s 16 limited partners the opportunity to sell their stakes in the team at the same $4 billion valuation that applied to his majority stake. Fourteen of the 16 partners took that buyout offer, with Kisco and Kent Circle representing the only two holdouts.
Kisco has since sought a buyout from Ishbia’s group; there are conflicting reports on whether Kent Circle has done the same. Bourguet’s report suggests both minority stakeholders have looked to be bought out, while McCann says Kent Circle hasn’t done so but has expressed “growing concerns” about management.
The price that Kisco and Kent Circle are demanding from Suns Capital Group LLC to buy them out is based on a valuation in excess of $6 billion, according to Bourguet. The complaint, per McCann, alleges that Ishbia’s LLC didn’t respond in good faith to Kisco’s efforts to divest its shares by June 1 and instead issued a capital call for June 2 with “no advance notice.” The per-unit valuation conveyed on that call was “strikingly low and bears no relationship to the actual value of the company which is worth billions,” according to the plaintiffs.
In a letter to Kisco and Kent Circle, Suns Capital Group LLC indicated it has no objections to the minority partners finding another buyer for their shares, per Bourguet. However, the majority ownership groups insists that the minority stakeholders have no right to demand Ishbia’s LLC be the one to buy them out at a significantly higher valuation than the 2023 price.
Kisco and Kent Circle, meanwhile, argue in their complaint that the majority ownership group has been putting pressure on and diluting the team’s minority owners, citing “mismanagement and lack of transparency.”
According to Bourguet, the plaintiffs suspect Ishbia’s group of entering into undisclosed side deals and also raised questions about the funding of a practice facility for the WNBA’s Phoenix Mercury. As McCann writes, the complaint states that facility was “seemingly paid for using” team funds but that the minority stakeholders were “provided virtually no information” about how it was funded or the process used to determine its funding.
Attorneys for Suns Capital Group LLC will have the opportunity to respond to the complaint, McCann notes.
Oh baby a soaking wet billionaires slap fight! 🍿
So the two minority owners are currently in the Find Out phase.
Basically the minority owners didn’t want to sell at the 4B mark and now that the Suns are worth 7B they want to sell at that price because they think the value will go down if the Suns tank for the next 5 years or so.
are they wrong?
The Celtics just sold for 6B I think they are more valuable than PHX, who also dont own the arena. Its still 4B, might have even fallen since the team sold for that as top contender that had been in the playoffs 4 years in a row with a finals run in there. Now they have one of the worst 0-6 year outlooks of any team in the NBA. They have no draft picks, and one player of real value. I bet if they do trade Booker it wont be till after the contract kicks in and he is worth way less making 75M. They also have lost the broadcast deal in place at the time of the sale with Bally, and Im just guessing since league wide revenue drops have been blamed on it, that the new deal doesnt pay as much. I think you could make a real argument that this team isnt even worth 4B. Like are they worth more than POR?
Inflation muddies this so much… The Suns will be worth less in 5 years, but the number will say 10 billion…
Best to get out before the economy tanks further… An over spending owner like Ishbia is just icing… Celtics got sold for similar economic reasons… Good time to get out and invest in other assets…
Economy is only tanking for working and middle class Americans. The rich are getting richer. The US economy is still humming.
For now…
The rich need consumers… and they are losing them both at home and abroad…
This mismanagement by Ishbia just makes me wonder which rich uncle handed him his business. Makes me sick frankly
Wasn’t an uncle. It was more direct, his Dad.
Go figure! Smdh
1 Never trust a guy who made his fortune in mortgages!
2 Who buys a multi billion dollar business and puts it in an LLC? Only a mortgage guy…
3 If holdout parties did not accept share value at time of 4B sale they have every right to demand shares at assessed team value now. That’s how shares in a company work.
4 If Ishiba refuses to payout these shareholders this will get settled in court and cost him even more money.