The Firms

September 14, 2011 1:35 PM

King & Spalding Settles $195 Million Malpractice Suit Filed by Atlanta Spirit

Posted by Brian Baxter

A consortium that until recently owned the NBA's Atlanta Hawks and NHL's Atlanta Thrashers has reached an agreement with King & Spalding to settle a malpractice it suit filed against the firm in January—ending a dispute that had both parties gearing up for a month-long trial, according to sibling publication the Daily Report.

Atlanta Spirit LLC sued King & Spalding in Fulton County Superior Court in Atlanta over the firm's alleged role in crafting a contract that was the subject of a bitter six-year litigation battle between members of the ownership group and former co-owner Steve Belkin.

Belkin fell out with his former partners when he objected to a 2005 trade that brought the Hawks former Phoenix Suns guard Joe Johnson, who remains with the team to this day. The standoff saw the remaining members of the Atlanta Spirit group, including J. Rutherford Seydel II, a son-in-law of media mogul Ted Turner and name partner at Atlanta firm Davis, Pickren, Seydel & Sneed, seek to oust Belkin from the partnership.

The ensuing litigation ultimately concluded with a settlement in December 2010 that saw the other members of Atlanta Spirit buy out Belkin's 30 percent stake in the ownership group. The following month, King & Spalding and corporate practice leader Raymond Baltz, Jr., found themselves on the receiving end of a malpractice suit filed by Atlanta Spirit seeking $194.5 million in damages from the firm.

In the suit, Atlanta Spirit claimed that Baltz and King & Spalding were retained in 2005 when the group was looking to buy out Belkin's stake in the consortium. The suit alleged that a contract drafted by the firm was "fatally flawed" because it prevented Atlanta Spirit from selling the Thrashers for more than five years while it battled Belkin in court. (The Daily Report has more of the back story on the long-running dispute between Belkin and his former partners.)

The malpractice suit sought $14.5 million from King & Spalding in litigation expenses for the court fight with Belkin, $50 million for a loss in franchise value for the Thrashers, and reimbursement for $130 million in operating costs for the struggling hockey team, which was sold for $170 million in May to an ownership group that moved the team to Winnipeg.

The malpractice dispute ended Friday when Altanta Spirit filed a motion in state court to dismiss the suit, according to the Daily Report. Terms of the settlement are confidential.

The suit had generated demands for records and testimony from more than a dozen non-party firms in Georgia and out of state, according to the Daily Report. Among those firms from whom documents were sought: league counsel at Proskauer Rose and Skadden, Arps, Slate, Meagher & Flom, counsel to former members of the Atlanta Spirit group at Weil, Gotshal & Manges, and Belkin's lawyers from Wilmer Cutler Pickering Hale and Dorr and Goodwin Procter.

Alston & Bird partner Steven Collins represented King & Spalding in the malpractice suit, while Atlanta Spirit turned to Everette Doffermyre, a name partner at Atlanta firm Doffermyre Shields Canfield & Knowles.

Atlanta Spirit has also had a need for corporate counsel in recent months as it offloads its sports holdings. DLA Piper took the lead advising the ownership group on its sale of the Thrashers earlier this year, and the firm reprised its role in August by representing Atlanta Spirit on the proposed sale of the Hawks and operating rights to the team's 19,500-seat Philips Arena to pizza chain owner Alex Meruelo. (DLA corporate partner Charles Baker was named an Am Law Dealmaker of the Week for his work on the Hawks transaction.)

King & Spalding has stayed busy this year handling its own high-end sports deals. The firm represented Texas billionaire R. Drayton McLane, Jr., in May on the $680 million sale of the Houston Astros baseball team to local businessman James Crane.

Make a comment

Comments (0)
Save & Share: Facebook | Del.ic.ious | | Email |

Reprints & Permissions


Report offensive comments to The Am Law Daily.

The comments to this entry are closed.

By: TwitterButtons.com

From the Newswire

Sign up to receive Legal Blog Watch by email
View a Sample