How the NBA and Shelly Sterling kneecapped Donald Sterling's lawsuit


The Sterling Family Trust, now apparently run by Shelly Sterling, agreed to indemnify the NBA against any lawsuits by Donald Sterling. Here's what that means in a practical sense.

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On Friday, the NBA announced it had reached a settlement with Shelly Sterling and the Sterling Family Trust to allow the Los Angeles Clippers to be sold to former Microsoft CEO Steve Ballmer, assuming approval by the NBA Board of Governors, which we can assume will be a unanimous vote.

This means that Tuesday's vote to strip the Sterlings of the Clippers won't happen. Instead, sometime soon, Ballmer will take over.

But earlier on Friday, Donald Sterling's lawyer told reporters the real estate mogul would be suing the NBA for $1 billion in damages related to his punishment from the league. That's why this line in the NBA's statement is the most important:

Mrs. Sterling and the Trust also agreed not to sue the NBA and to indemnify the NBA against lawsuits from others, including from Donald Sterling.

Indemnification is protection. What this part of the agreement means is that if Donald Sterling or anyone else sues the NBA over the sale of the Clippers and wins, the Sterling Family Trust -- which is basically all of Donald and Shelly Sterling's money, including the $2 billion being deposited by Ballmer -- pays the loss. By suing the league at this point, Donald Sterling would essentially be suing himself.

One question is why Shelly would give the NBA the indemnification clause -- it's her money at stake, too. The best guess at this point is that it would appear to set a cracking pace for resolution of the saga. The sooner the saga ends, the sooner Ballmer forks over the $2 billion bounty. The Sterlings have discussed likely divorce publicly; one assumes that can't happen until this is resolved. Shelly Sterling could be itching to detach herself legally and financially from her husband, and not a soul would blame her.

Shelly Sterling wrested control of the trust from Donald Sterling by apparently having him deemed mentally incapacitated due to a diagnosis of Alzheimer's. After the NBA's statement, Donald Sterling's lawyer reiterated that the $1 billion lawsuit is being filed. As Michael McCann noted, one benefit despite indemnification is that other NBA owners and Adam Silver could be deposed, and Donald Sterling could make things uncomfortable during evidence discovery.

So the question comes down to this: Is Donald Sterling enough of a jackwagon to sue the NBA on principle and if so, will a judge allow him to play his games in the courtroom?


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