Perot Jr sues Cuban over losses of Dallas NBA team

* Perot accuses Cuban of running Mavs into insolvency

* NBA team lost more than $50 mln in fiscal 2009-lawsuit

* Cuban says “Mavs fans have nothing to worry about”

By Ben Klayman

DETROIT, May 12 (BestGrowthStock) – In a Texas-sized legal battle,
billionaire Ross Perot Jr. filed a lawsuit this week, accusing
fellow billionaire Mark Cuban of driving the Dallas Mavericks
basketball team into insolvency.

A Perot-controlled company with a 5-percent stake in the
National Basketball Association team — Hillwood Investment
Properties — charged Cuban’s Dallas Basketball Ltd (DBL),
which operates the Mavericks, with breach of contract,
disregarding the rights of minority owners and breach of
fiduciary duty, according to the lawsuit filed in a Texas state
court.

“It is insolvent and/or in imminent danger of insolvency,”
Hillwood said of the NBA team in the lawsuit filed on Monday.

“DBL currently does not have revenues sufficient to pay its
operating costs, and without additional borrowings, DBL will
not be able to fund its projected operating losses or to pay
its obligations as they become due,” according to the lawsuit.

Perot’s Hillwood is seeking unspecified damages and
attorney costs, claiming Cuban’s operation of the team has hurt
the value of his investment in the Mavericks. Perot sold Cuban
control of the team in 2000.

Perot, who is worth $1.4 billion according to Forbes
magazine, also requested through Hillwood that the court
appoint a receiver to operate the NBA team and name an
independent forensic accountant to investigate its finances,
according to the lawsuit. Cuban owns about 76 percent of the
team, according to the lawsuit.

Cuban, worth $2.4 billion according to Forbes, could not be
reached to comment, but said in an email to the Dallas Morning
News that the team was not insolvent.

“Mavs fans have nothing to worry about,” he told the
newspaper. “The Mavs operations and debt are guaranteed by me.
There is no risk of insolvency. Everyone always has been and
will be paid on time.”

DBL has lost more than $273 million in Cuban’s nine years
of operating the team, including more than $50 million in the
fiscal year ended in June 2009, according to the Perot lawsuit.
DBL’s debt now likely tops $200 million and the team’s internal
projections show the projected interest-bearing debt balance
reaching more than $281 million by June 2013, according to the
lawsuit.

Cuban told the News he is the team’s largest debtholder and
personally guarantees the rest, and suggested Perot might be
seeking a buyout. However, Cuban added there was no chance he
would lose control of the Mavericks.

Cuban, who has turned the Mavericks into a winning team
that regularly makes the postseason, has a range of business
interests. His hot temper when arguing with referees during
Mavericks games has earned him millions of dollars in fines,
while his dancing skills landed him on the television show
“Dancing With the Stars.”

He also owns HDNet, a national high-definition television
network, and Landmark Theatres. Magnolia Pictures, the
theatrical and home entertainment distribution company that he
co-owns through the company 2929 Entertainment, released the
documentary “Enron: Smartest Guys in the Room.”

Perot is a real estate developer and co-founded computer
services company Perot Systems Corp along with his father and
former U.S. presidential candidate Ross Perot. That company was
later sold to Dell Inc (DELL.O: ).

The case is Hillwood Investment Properties III Ltd v.
Radical Mavericks Management LLC et al, Dallas County Court,
No. 10-05639.

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(Editing by Gerald E. McCormick)

Perot Jr sues Cuban over losses of Dallas NBA team