Sports fans in Virginia may have heard about the multi-million-dollar lawsuit filed by the owner of the struggling Houston Astros. The lawsuit was filed on Nov. 21 against a former co-owner of the baseball team and two major media outlets, accusing them of conspiracy, fraud and misrepresentation. The team's owner says he may have lost hundreds of millions of dollars due to the misrepresentation of the value of a regional television network.
When the owner purchased the Astros franchise in 2011, a 40 percent share in a regional network was included in the $615 million transaction. The lawsuit alleges that the former owner falsely represented the value of the network and the cost of subscription fees. The owner of the Astros says that the franchise will continue to lose money over the next few years if the deal with the network continues.
The media companies named in the lawsuit, Comcast Corp. and NBC Universal Media, deny any wrongdoing. Prior to the filing of the lawsuit, a bankruptcy petition was filed on behalf of Comcast SportsNet Houston, and the company says it will continue efforts to reorganize following bankruptcy. The company also said that it looks forward to 'vindicating itself" in regards to the lawsuit. The former owner, who was also accused of breach of contract, has said that the 2011 deal was completely 'transparent" and also denies any falsification of facts.
When parties to an acquisition feel that pertinent information was not disclosed, they may choose litigation as a means of recovering damages. An attorney with knowledge of business transactions may be able to determine if representations and warranties in the purchase agreement have been breached.
Source: ESPN, "Houston Astros owner files lawsuit", November 22, 2013