Report: Charles Wang sued for backing out on deal to sell Islanders
Charles Wang has been sued for $10 million by a group claiming he backed out of a handshake agreement to sell the Islanders.
Charles Wang, owner of the New York Islanders, is being sued by hedge fund manager Andrew Barroway, who claims Wang backed out on a $420 million deal to sell the team to Barroway, according to the New York Daily News.
More from the Daily News:
In papers filed in Manhattan Supreme Court, Barroway's corporation, NY ICE claims the parties "shook their hands on an agreement" and NY Ice started to line up NHL approval and financing.
However, Wang "without notice, abruptly refused to proceed to close the transaction and honor the terms of their 70-page purchase agreement but instead improperly sought to renegotiate the already agreed upon price" in March.
"Wang was having seller's remorse," the court papers say, "because he believed he had agreed to sell the Islanders for a price too low after hearing the unrelated news that a $2 billion bid was place to purchase" the Clippers.
"The failure to follow through with the sale has caused NY Ice irreparable harm" and if the deal can't go forward, the firm says in court papers, "NY ICE is entitled to the $10 million 'break up' fee to which the parties agreed" or to be reimbursed for its costs and losses.
This is the latest hard turn in what has been a summer full of them regarding the New York Islanders' sale.
This lawsuit comes just days after reports surfaced that talks had broken off between the two parties. It appears now we know one side's version of why.
The Islanders responded to the allegations:
According to #Isles team spokesperson re: Barroway suit: "There is no merit to the reports."— Katie Strang (@KatieStrangESPN) August 11, 2014
There have been a lot of ups and downs in this saga with reports, refuted reports and a whole bunch of rumors, but now there’s something tangible in the legal filings. Reports of snags in the negotiations were trickling out back in July, but it seemed few following the proceedings were surprised when talks broke off completely earlier this month.
According to the court filings (via the Daily News), the deal allegedly agreed upon in March would have given NY Ice, Barroway's company, 100 percent equity in the Islanders and Wang would get 25 percent interest in NY Ice. The alleged hand shake agreement took place on March 10, while aides worked out the remaining details in the following months. On June 10, Wang increased his price according to the suit, which blindsided Barroway's group.
According to the Daily News, court filings say that Wang informed Barroway on Aug. 1 that he had decided to sell the Islanders to another group, which would be a rather shocking new development if true.
Needless to say, the optics aren't great for Wang if you believe the claims reportedly made in the suit. Possibly backing out on a deal that had allegedly been agreed upon already is not going to send a great message to other prospective buyers. Additionally, it calls to question just how willing Wang is to actually sell the team and whether or not is properly valuating the team as well. Of course, any businessman would do well to get the absolute best price to give up something he owns.
With the Islanders flatly denying the reports, it's a he said, he said situation. That makes it unlikely the public will ever know the whole story.
The Islanders are set to play their final season on Long Island this year. The club is slated to move to Barclays Center in Brooklyn for the start of the 2015-16 season. The new location and facility is expected to help boost revenues, making the club a somewhat more attractive option to buyers.
In the end, it looks like we haven't heard the last of this Islanders ownership saga, which is sure to be full of more twists and turns before it reaches its end.
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