Appeals Court Agrees Cuban Is Not Mismanaging Mavericks.
On Thursday August 21, judgment was entered in the Court of Appeals for the Fifth District of Texas affirming the trial court’s November 2011 decision that the Dallas Mavericks were not being mismanaged and did not require court-appointed receivership.
The lawsuit, filed in 2011 by previous majority owners, Hillwood Investment Properties III Ltd., claims that Mark Cuban’s ownership of the Mavericks has been “careless and reckless” resulting in a loss of substantial investment value to the now minority owners. Hillwood is seeking court-appointed receivership due to Cuban’s alleged mismanagement which includes a “litany of questionable, business, financial and personnel decisions.”
The trial court did not agree as Hillwood could not provide any evidence to establish iunsolvency or the imminent threat of insolvency, which is required to place an organization in receivership. The appeals court agreed with the trial court noting that the Mavericks do continue to lose money on a yearly basis, but they are not unable to pay debts as they become due. Insolvency is defined as a person unable to pay debts as they become due in the usual course of business.
The case originally gained notoriety when the Cuban’s legal team filed a succinct, four page reply to the Hillwood motion for summary judgment. Containing only five sentences of argument and one picture of Cuban and the Mavericks hoisting the NBA Championship trophy in 2011, the brief argued that the Mavericks clearly couldn’t be mismanaged if they just won the franchise’s first championship. The brief was widely circulated throughout social media and was dubbed the “Greatest Legal Brief in the History of Jurisprudence.”