Suns’ Mat Ishbia sued by minority owners over alleged fraud

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Two Phoenix Suns minority openers claimed majority owner Mat Ishbia is using the franchise as “his personal piggy bank,” according to a new lawsuit.

Ishbia is engaged in an ongoing legal battle with Arizona-based real estate businessman Scott Seldin and former professional tennis player Andy Kohlberg, who are holdovers from the previous ownership. Ishbia purchased the team in 2023 from former majority owner Robert Sarver.

Seldin and Kohlberg sued the team three months ago, alleging that Ishbia refused access to internal records and that he failed to meet a deadline for a capital call on June 2 as a means to “exert pressure on and dilute” the shares held by the Suns’ minority owners.

Ishbia countersued in October, prompting the minority owners to drop their suit a few days later. The latter, however, are claiming breaches of contract and fiduciary duty.

“Ishbia does not own the Suns to make money for the company but he does operate it as a personal fiefdom for his own personal gain and for the benefit of his other businesses, including his mortgage company United Wholesale Mortgage,” the latest filing in the Delaware State Court stated on Monday.

“The reality is that Ishbia is using the Suns as his personal piggy bank, including through a lengthy list of conflicted transactions — only some of which the minority owners are aware of.”

Regarding the missed capital call, Seldin and Kohlberg said Ishbia tried to dilute their shares if they didn’t fund a capital raise on a quick deadline.

“In other words, Ishbia blundered into the very trap he set for the minority owners and faced a devastating dilution of his ownership interest if his failure was discovered — a failure that would wipe off his net worth and put his continued status as an NBA team owner and governor in jeopardy,” the filing states.

Ishbia, via a spokesperson to ESPN, has denied the allegations.

“This isn’t a lawsuit; it’s a shameless shakedown dressed up as legal process,” the spokesperson said. “From day one, Mat Ishbia was transparent that he was going to do things differently. Contrary to how the team was previously managed, Mat made it very clear he would invest significantly into the Suns and (the WNBA’s) Mercury. He told all the investors that they could step up with him or sell their stake and step aside. Kohlberg and Seldin stayed in and now they’re trying to freeload off the value Mat created.

“Kohlberg and Seldin want to drag the organization backward, and they openly admit in this filing that investing in the team and its fans ‘makes no business sense.’ They are advocating neglect. They are free to sell their shares in the open market and if they don’t, they should be prepared to lose this lawsuit and participate in Mat’s continued investments in the teams and community.”

–Field Level Media