19 May 2006

When Deals Go Bad...

...they can go real bad. The Washington Business Journal on the court case that has been filed in the wake of GDP's failed attempt to buy DC United:

It's unclear exactly why the agreement between Global Development Partners and D.C. United owner Anschutz Entertainment Group (AEG) fell through, although McAteer claims in his suit that Major League Soccer would not approve "ownership of a franchise by an entity involving" Lauterbach, Kissler and Al-Sadi.


Updated with Analysis/Speculation: Okay, so let's see what's going on here. It was the DCenters contention that Global Development Partners was leveraged pretty heavily, and then they lost some major projects (such as the new baseball stadium for the Richmond minor league baseball team). This is the second time I've seen a mention that MLS didn't want to go through with the deal with GDP. It's possible that they weren't just leveraged with debt to finance their ambitions, but they were also paying a bit fast and loose. So it wasn't GDP that ran away from MLS, but MLS that pulled out once they got a glimpse of some stuff in GDP's ledger.

The lawsuit could be interesting if it goes to trial (a settlement must always be considered a likely outcome) because then we're going to have depositions, affadavits, and testimony. Someone from AEG and MLS will have to explain why the deal didn't go through. It could get interesting. I see no direct impact to DC United, other than being a nuisance if Kevin Payne has to take the stand, but it could be very, very interesting. The DCenters will monitor...


At 19 May, 2006 14:58, Blogger I-66 said...

Any sale of the team would probably also be slowed by this, though I doubt it will go GDP's way in the end. Grasping for straws perhaps?

At 19 May, 2006 15:02, Blogger D said...

The only way this slows the sale is if propspective suitors are waiting to hear precisely why the deal with GDP fell though. GDP isn't blocking the deal, as apparently the decision between AEG/MLS/GDP was mutual to not go forward.


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