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Will ownership of Clippers be affected by Sterling divorce?

As many of our San Francisco readers know, there are many things that can complicate divorce proceedings. Everything from child custody battles to arguments regarding spousal support can lead to contentious litigation.

But perhaps the most problematic is business ownerships between married couples. When a couple divorces and it’s time for property division, ownership of a business also comes into play. But if your situation is particularly contentious then you could find yourself facing lengthy and even frustrating litigation without proper legal help.

This can perhaps be best exemplified by the case of Los Angeles Clippers’ owner Donald Sterling and his estranged wife Shelly Sterling. The couple’s move for divorce came shortly after Donald was accused of making racist statements. But this allegation is not the only thing that is complicating the situation.

Right now the Clippers are owned by the Sterling Family Trust. According to California laws that govern the trust, Shelly is entitled to 50 percent ownership of the team in the event of a divorce. Depending on the terms of the divorce settlement though, Shelly could be awarded full ownership of the team. In earlier statements made by the NBA though, Donald’s actions may have affected this.

Some of the assets that Shelly will receive during property division hinge upon the NBA’s desire to terminate her estranged husband’s ownership of the team. Although the NBA, in a recent press conference, explained that their decision to oust the owner would only apply to Donald, Shelly is still concerned that she may lose stock in the team.

This is within good reason too considering one of the league’s by-laws which states “if a controlling owner’s interest is terminated by a three-quarter vote, all other team owners’ interests are automatically terminated as well.” If this happens, then Shelly could lose a large portion of assets that she would have otherwise been entitled to under California’s community property laws. Now our readers will just have to wait and see if Shelly needs to fight back against this or not.

Sources: The Wire, “Could a Sterling Divorce Allow Shelly Sterling to Keep the Clippers?” Polly Mosendz, May 15, 2014

Forbes, “NBA Changes Course And Wants To Oust Rochelle Sterling From Clippers Via Guilt By Association,” Mike Ozanian, May 21, 2014