The Lakers and Dr. Buss’ plan
Legal experts who’ve seen documents say daughter Jeanie is well set to keep control.
Buried in the 39-page trust document stamped “Confidential” is the paragraph at the heart of the struggle to control the Lakers.
Wedged between legalese about distributing household items and trustee powers, the 148 words lay out Jerry Buss’ plan for who would run the team after his death in 2013.
“The trustees,” the document says, “shall take whatever actions are reasonably available to them to have Jeanie M. Buss appointed as the new Controlling Owner of The Los Angeles Lakers, Inc.”
The trust document reviewed by The Times — one of four virtually identical trusts through which the Buss family owns 66% of the Lakers — is a key part of the simmering dispute between Jeanie Buss and her brothers, Jim and Johnny, that became public last week.
“The language is pretty clear that Jim and Johnny
have an ongoing duty to maintain Jeanie as the new controlling owner,” said Patrick Goodman, a probate law expert who teaches at UCLA. “Dr. Buss left practically no wiggle room to argue otherwise.”
Johnny Buss called an annual meeting of the Lakers’ board of directors last month, three days after his sister removed Jim Buss as the team’s vice president of basketball operations and installed Magic Johnson as president of basketball operations. The notice proposed four directors: the brothers, AEG President Dan Beckerman and investor Romie Chaudhari. It didn’t include Jeanie Buss, the team’s president and controlling owner.
But according to Section 13 of the Lakers’ bylaws, Buss must also be a director to be the team’s controlling owner.
“At each annual meeting of shareholders the shareholders shall elect one of the directors of the corporation ... to be the corporation’s National Basketball Association Governor/ Controlling Owner,” the section says.
In court papers, attorneys for the brothers say “that may or may not be true,” but didn’t elaborate.
A person with direct knowledge of the situation who spoke on the condition they not be identified said the tension between the siblings has been building since last fall. The person said scenarios including buying out the brothers’ stakes in the team or borrowing money on their behalf were discussed before the matter became public.
“She’s got by far the strongest side of the argument,” the person said. “She needs to press her advantage, clarify this and get it out of the way.
“Ultimately, it comes down to money. If somebody wanted to buy the brothers out, I’m sure there’s a price.”
Jim Buss declined to comment Tuesday; Jeanie Buss hasn’t spoken about the matter in public, citing ongoing litigation.
Last week, she sought a temporary restraining order in Los Angeles County Superior Court to prevent the brothers from holding the meeting scheduled for March 7 in El Segundo. The 10-point agenda included approving a $25-million distribution to shareholders and $10,000-a-month compensation to directors with a stake in the team.
The person with direct knowledge of the situation called the $25-million distribution “highly unusual.”
Among other action items: amending the bylaws to indemnify directors and barring the controlling owner and others from purging emails.
The night before the Friday hearing in Superior Court, the brothers signed a document reelecting their sister as controlling owner. Her attorney, Adam Streisand, questions its validity because not all of the team’s shareholders signed the papers.
The three siblings are co-trustees of the four family trusts. They also have the power to elect three of the five directors for the Lakers.
“Even this morning, I cannot get counsel for Johnny and Jim to confirm they will do what is required, which is at a minimum to vote the stock to elect her director because you have to be a director to be the controlling owner,” Streisand told Judge David J. Cowan in the Friday hearing.
Streisand withdrew the restraining order request after the brothers sent a notice the day before postponing the meeting for an unspecified period. A trial is scheduled for May 15 — the attorney wants a court order to prevent the brothers from proposing another board of directors that doesn’t include his client.
Legal experts who have reviewed these documents believe Jeanie Buss is well positioned to retain control of the Lakers.
“Certainly the trust, as I’ve seen it, is worded in a way that gives her a fairly strong endorsement,” said Michael McCann, a sports law professor at the University of New Hampshire.
The experts don’t see a clear path for the brothers to successfully challenge their sister in court. McCann called a scenario in which the brothers would convince other board members to remove her a “hypothetical that doesn’t seem grounded in reality” and called dissolving the trust “extremely unlikely.”
Adam Bass, an attorney representing Chaudhari, said in a statement to The Times that Jim Buss and his client met through a non-basketball business transaction.
“He never agreed to be included as a candidate for the Lakers’ board of directors,” Bass said. “In addition, Mr. Chaudhari made it very clear that he is not, nor has he ever been, interested in participating in a family dispute.”
In similar fashion, Beckerman learned of his inclusion in the since-rescinded meeting notice when he received it last month. He represents AEG owner Philip Anschutz, who owns about 30% of the Lakers, on the team’s board.
“We fully support Jeanie Buss as the controlling owner of the Lakers,” Beckerman said in a statement. “She has demonstrated her commitment to the franchise and we have complete faith and confidence in her continued leadership.”
An attorney for the Buss brothers didn’t return a request for comment.
nathan.fenno@latimes.com Times staff writer Tania Ganguli contributed to this report.