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Former majority owners of the Los Angeles Sparks sue law firm, say legal advice forced them to reduce their share of team

Published on October 29, 2012


The former majority owner of the Los Angeles Sparks, Gemini Basketball Holdings LLC (Kathy Goodman and Carla Christofferson), filed a lawsuit against its former attorney for legal malpractice in Superior Court reports Courthouse News Service. The group that purchased the team from the Los Angeles Lakers in 2006 claim that the actions of Marc Samotny of the law firm Patzik, Frank & Samotny forced it to reduce its ownership in the team during negotiations to avoid defaulting on loans that totaled $4 million.

GBH, consisting of Goodman, a high school teacher, and Christofferson, an attorney, purchased the team from Lakers owner Jerry Buss for $10 million in December 2006. They financed the deal with a loan of $3.25 million from Broadway Federal Bank according to the news service. They borrowed an additional $750,000 in 2008. Gemini sought to make moves to avoid defaulting on the loans in 2011.

According to the lawsuit, current majority owners, Williams Group Holdings LLC, a family-owned business that includes Sparks CEO and former NBCUniversal executive Paula Williams Madison, suggested Samotny to help GBH with its financial issues. GBH claims that Samotny worked on behalf of WGH, shutting GBH out of negotiations with Broadway Federal, withheld information and worked with the current majority owners to put GBH in crisis mode.

Because of the law firm’s malpractice, Broadway Federal sued Gemini, forcing it “into accepting a squeeze-out” of its interest in the team, according to the complaint.

“By early 2012, WGH had used the financial crisis of Gemini to force GBH to dilute its ownership interest and waive accrued management fees,” the complaint states.
Courthouse News Service

WGH is also an investor in Broadway Federal, the largest African American bank west of the Mississippi. Elrick Williams, the CEO of WGH, and Madison’s brother, is on the bank’s board of directors.

Former Sparks player Lisa Leslie is also an investor in the team. She joined the ownership group in August 2011. The team’s press release announcing her investment mentioned Goodman and Christofferson as board members of the ownership group. In January 2012, the Sparks announced that WGH would have a greater role in managing the team. Goodman and Christofferson resigned from the team’s board of directors but retained their financial investment in the Sparks.

Christofferson is the managing partner of the Los Angeles office of O’Melveny & Myers LLP and focuses on commercial civil litigation according the firm’s website.

The current Sparks staff directory lists Leslie as an investor and consultant. Goodman and Christofferson are not listed.

Gemini Basketball Holdings LLC registered in Delaware in September 2006. John Walton of Pasadena is representing the company in the lawsuit.

Walton and the Sparks did not return inquiries before this article was posted.


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