Published: May 21, 2008 10:07 pm            

Schultz claims Bennett breached contract

SEATTLE (AP) — Former SuperSonics owner Howard Schultz has added a third claim to a lawsuit that seeks to void the team's 2006 sale to new owners who are planning to move the Sonics to Oklahoma City.

The Starbucks Corp. chairman has amended his federal court lawsuit to allege that Clay Bennett and his Oklahoma-based partners breached their contract with Schultz and other Sonics owners by not making a realistic and full effort to find a new arena in Western Washington before applying to move the team.

Bennett spokesman Dan Mahoney declined comment Wednesday on both the breach-of-contract allegation and Schultz's lawsuit in general.

On Tuesday, Schultz's lawyers added "breach of contract" to his initial claims last month of "negligent misrepresentation" and "fraudulent inducement." Schultz is seeking to void the $350 million sale so the Sonics can be sold to potential local owners instead and stay in Seattle long term.

No trial date has yet been set for Schultz's lawsuit. U.S. District Judge Marsha Pechman this week ordered both sides to issue a joint status report by June 30.

NBA owners last month overwhelmingly approved Bennett's application to move the Sonics to his hometown of Oklahoma City, pending the outcome of a trial between the Sonics and the city of Seattle over how to reconcile the final two years remaining on the team's lease at KeyArena. That trial, scheduled to begin June 16, is also in Pechman's court.

In the amended complaint, Schultz says his Basketball Club of Seattle sold the Sonics to Bennett's Professional Basketball Club LLC only because of a side letter Schultz required as part of the sale.

"Mr. Bennett wrote to Mr. Schultz that 'it is our desire to have the Sonics ... continue their existence in the Greater Seattle Area' and specifically denied any 'intention to move or relocate the team,'" Schultz's latest filing said.

"That statement was false from the moment it was made. ... They were willing to lie, and did lie, to complete the deal."

Schultz argues that Bennett and his co-owners have "intentionally mismanaged the Sonics to improve their case for breaking the lease." The team recently finished the worst season in its 41-year history in Seattle, with a 20-62 record and declining attendance.

The amended complaint also alleges Bennett merely "went through the motions" of trying to find a new home for the Sonics in the Seattle area and floated a totally unreasonable proposal for a $500 million building in the suburb of Renton that Bennett at the time said would be the most expensive basketball arena ever built. Schultz alleges the plan to use $278 million in public tax revenues to help fund the proposed arena amounted to "unprecedented amounts in public subsidies."

The state Legislature took no action on Bennett's proposal in the spring of 2007. Schultz claims Bennett took "no meaningful action" after that to find another arena plan.

Schultz filed suit soon after certain e-mails among the Sonics' current co-owners became public. The e-mails showed the Oklahoma parties' impatience with wanting to move the Sonics to Oklahoma City well before Bennett's deadline of October 2007 — part of his purchase agreement with Schultz — to find a new arena in King, Pierce or Snohomish counties in Washington. Last October, Bennett gained a contractual right to move the team.

The original complaint referenced an e-mail from Bennett to his co-owners two days before the sale. It stated that if a new arena deal was reached to keep the Sonics in Seattle, the Professional Basketball Club could just sell the team in a "sweet flip," and still leave the ownership group "in good shape for something in OKC."

In another e-mail from April 2007, Bennett stated, "I am a man possessed! Will do everything we can," in response to co-owner Tom Ward asking if they were in for another "lame duck season" in Seattle.

        

• Click to discuss this story with other readers on our forums.