Two minority owners of the Phoenix Suns have sued the team and its controlling owner Mat Ishbia, demanding to see records in order to investigate the status of the team's business and financial condition.
The lawsuit was filed last week in a Delaware court, but KJZZ obtained a redacted, public version of the complaint.
Kisco WC Sports II LLC and Kent Circle Investments LLC — and their respective principals, Andrew Kohlberg and Scott Seldin — allege that Ishbia and Suns Capital Group are depriving other members of ownership with basic information about the management of the team.
“Our clients sued to obtain records to which they are entitled as minority owners of the Suns," Michael Carlinsky, a co-managing partner of Quinn Emanuel Urquhart & Sullivan and attorney for the plaintiffs, said in a statement.
"They are concerned by the manager’s approach towards minority owners, and want more information about certain spending and capital raises in which the manager has engaged,” the statement reads. “Transparency with minority owners is not optional, and our clients think it is critical to the success of the Suns.”
In the lawsuit, the plaintiffs say they're making their demand for records in search of information that could reveal possible breaches of the partnership agreement, mismanagement of the company and conflicts of interests.
The plaintiffs also cite a belief that Ishbia may have “entered into multiple undisclosed side deals with other investor members," including on the funding of a new Phoenix Mercury practice facility.
The lawsuit details that Kisco attempted to negotiate a buyout in September 2024, and sought to complete the deal by June 1.
But, as noted in the lawsuit, “rather than respond in good faith to Kisco’s sale offer by the requested June 1 date, the Manager (Ishbia) instead issued a (REDACTED) capital call the next day, June 2, 2025, and demanded that all members provide their pro rata share of the call.”
The plaintiffs say they had no advance notice of the capital call but complied “under threat of severe and punitive dilution.”
In a letter sent to plaintiffs’ attorneys and obtained by KJZZ, a lawyer for Ishbia described the lawsuit as an intimidation tactic for buyout negotiations.
“This letter is in reference to your clients’ demand that we purchase their limited (non-controlling) interest for $825,000,000 imputing an enterprise value in excess of $6 billion, which would be a 60% increase from the franchise value when ISH Suns acquired a controlling interest in 2023.”
The letter signed by David Marroso of O’MELVENY & MYERS says Kohlberg and Seldin are the only minority owners who did not accept buyout offers when Ishbia bought the majority share of the team.
“Instead, Kohlberg and Seldin have resorted to threatening baseless litigation and sensationalized press coverage as a means of intimidating and coercing ISH Suns into unprincipled and unjustified buyout negotiations,” Marroso wrote. “That will not work.”
Ishbia, a mortgage executive, bought a majority stake of the Phoenix Suns and Phoenix Mercury from the embattled owner Robert Sarver for $4 billion in December 2022. Ishbia and his brother Justin said then that they would be acquiring more than 50% of the franchises, which includes the entirety of Sarver’s share as well as some holdings from minority partners.
The sale was officially approved in February 2023.
Last week's lawsuit marked the latest in a string of multiple legal actions against the Suns and Mercury.
Last month, the Suns confirmed it fired Gene Traylor, a former security manager who filed a lawsuit against the team in May alleging discrimination, harassment and unlawful retaliation. The team said at the time that Traylor was terminated after an outside investigation found he'd violated company policies regarding confidential information.
In July, former Mercury interim coach Nikki Blue filed a lawsuit alleging the Suns organization engaged in unequal treatment based on race and gender and unequal pay based on race. She also claimed her employment was terminated in retaliation for complaints about unequal treatment.
In November, Andrea Trischan sued the team, alleging racial discrimination and unlawful retaliation that led to her termination. Trischan had been the team’s manager of diversity, equity and inclusion for about 10 months in 2022 and 2023.
The Associated Press contributed to this report.
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