Saturday, July 26th, 2014

Time to Fret

9

A California juudge has rejected the plea agreement involving Anaheim Duck owner Henry Samueli. Not only did the judge make it clear he wanted to see a jail sentence, he seemed to imply Samueli deserved to be charged with more serious crimes:

“It would erode the public’s perception of our justice system to accept a plea agreement containing an unprecedented payment of $12 million to resolve the criminal liability of one of four coconspirators in an alleged $2.2 billion securities fraud.”

Samueli has been given time to negotiate a more acceptable plea agreement. Failing that he may decide to withdraw his guilty plea and take his chances in a trial. Either way, it has become a lot more likely he’s going to spend some time in jail. It has also become a lot more likely that the league will be looking for new ownership in Anaheim. I can’t see how the current arrangement – Gary Bettman is acting as a go between between a suspended Samueli and the team – can be sustained if Samueli is in jail.

Way back when the SEC first charged Samueli, Bettman said “The Samuelis have been terrific owners. They’re perhaps the most community-minded and charitable people in all of Orange County. I am not going to fret about something that may or may not be substantiated at the end of the day.”

I think he is fretting about it now.

Postscript: In the story’s strangest twist, Samueli’s partner, Henry Nicholas, has been indicted for conspiracy and securities fraud and also faces charges that “he slipped ecstasy into the drinks of business associates and had a drug warehouse.”

Huh?

Update: Mirtle has more on Mr. Nicholas and the indictment against him. Apparently Nicholas enjoys “a lifestyle so extraordinarily profligate that not even the description of “Gatsbyesque” could suffice.”

Be Sociable, Share!

Comments

9 Responses to “Time to Fret”
  1. rajeev says:

    Slipping employees ecstasy, cavorting with prostitutes in an underground sex lair, backdating stock options, these are the pillars of community service and philanthropic work that have made orange county the bastion of wholesome, conservative suburbia it is.

  2. Tom says:

    Well, yes, but what will Bettman do about it? The precedent – Rigas and McNall – saw Gary strip away the franchise. That was a pretty easy call given those legal problems resulted in the bankruptcy of the team. That is not the case here.

    Can the league force Samueli to sell? Do they want to force Samueli to sell? Can they find a buyer? What if Samueli digs in his heels?

  3. rajeev says:

    all good questions, and i’m not sure anyone really knows. we do know, though:

    1) bettman’s quote about not going to fret blah blah blah was complete drivel that a more intelligent and less-sycophantic media would have busted him on. imagine if bryan murray had come out and said, “look ray emery’s a great guy, im not going to worry about something that may or not be true.” the response in the ott media would have been a tar and feathering. im sure bettman was mighty pissed about the samueli thing and im sure he damn well looked into it, but the implicit presumption that ‘our guys are great and things are the way i say they are’ in his comment is disgustingly condescending and contemptible.

    2) the nhl office looks so bad here, once again. oh, only two potential federal convictions against nhl owners this summer, that’s not that bad! meanwhile, the players are in the community, actually performing charitable works, participating in the right to play, not slipping employees ecstasy (although i guess there was that thing with huselius and tallinder a few years back), etc, yet the instant there’s ever a labor stoppage, fans will race back to their favorite mantra: greedy players, they make so much money just to play hockey, salaries out of whack, cant even go to the games anymore, oh ed snider bought his scottish terrier a new lear jet, you don’t say?

    3) i dont think bettman wants to force samueli to sell bc the dude has been a good owner thus far. bought on the cheap but invested money in the team, created stability, gone along w league mandates all the way. bettman would be forced, however, to force the sale if the pr effect got so grisly that it made the league look silly if there was no forced sale. in a sane world, an owner running a team from federal prison looks bad and creates shame on the behalf of the community and fans the team represents. in today’s nhl, the outcome is less clear. but this is really up to what bettman perceieves the effect to be, not about what bettman wants here. bettman wants the league to make as much money as possible, no more or less. to a large extent, how much money the league makes is based on the wants and desires of the fans.

    4) whereas the bankruptcies presented easier scenarios, i’m not sure there’s a nhl bylaw that states you can’t own a franchise while in prison (though there is probably one that says the nhl can force a sale for any cause or under very broadly stated justifications). depending on how crazy samueli is willing to get, id love to see him challenge the constitutionality of any attempted forced sale and have things get really messy down at the league office. they would love to be litigating two concurrent federal lawsuits on opposite coasts. sadly, it will almost certainly not come to this.

  4. Gerald says:

    Slipping employees ecstasy, cavorting with prostitutes in an underground sex lair, backdating stock options, these are the pillars of community service and philanthropic work that have made orange county the bastion of wholesome, conservative suburbia it is.

    rajeev, I would be inclined to cut you some slack on the above, but the following compounding of this misstatement compels me to step in here:

    meanwhile, the players are in the community, actually performing charitable works, participating in the right to play, not slipping employees ecstasy (although i guess there was that thing with huselius and tallinder a few years back),

    Can the crap, please. All of the stuff above has nothing – NOTHING – to do with Samueli. To link Samueli with Nicholas’ alleged actions in the way that you are doing is wrong. If the shoe were on the other foot, you would probably refer to it as “contemptible.” :-)

    I do agree that there is undoubtedly something in the NHL by-laws that allow the NHL to seize a franchise if the key person in ownership goes to jail. I would see no reason why such a provision would be unenforeceable. Samueli would be undoubtedly protected by a concurrent obligation on the part of the NHL to ensure that a fair price (as attested to by experts, by way of a fairness opinion from an investment bank) is paid for the franchise.

  5. rajeev says:

    knew that point was coming, which is why i tried to be careful not to import any of nicholas’ nonsense with samueli’s more “legitimate” illegal conduct. i dont proofread and i went for one too many jokes and threw in the ecstasy bit when contrasting player v owner conduct. you called me on it, fair enough. that said, take out that one line though and i think the other points remain.

    I do agree that there is undoubtedly something in the NHL by-laws that allow the NHL to seize a franchise if the key person in ownership goes to jail. I would see no reason why such a provision would be unenforeceable.

    yea i was thinking that there could be some bizarre constitutional protection argument against non-legislative deprivation of ownership rights for convicted felons. i mostly slept through con law, and those guys arent a protected class obv, but isnt there some argument that there’s no rational basis for making a prisoner give up control of an entity that he can in theory manage from prison? it’s a long shot, to be sure, and i was mostly reveling in fanciful doomsday scenarios, as i enjoy doing.

  6. Magicpie says:

    Man is everyone who posts here a lawyer?

  7. Tom says:

    I don’t think you have to apologise, Raj. Of course this element of the story involves Samueli. He is not guilty by association, but it is an association that reflects very poorly on Samueli. Not only did the associates allegedly perpetrate a $2.2 billion dollar securities fraud, one of the conspirators is charged with other serious – and perverse – crimes.

    Samueli may not have known about these other crimes, but he is going to get splattered anyway. Tough nougies, I say. He chose his partner. He’s known him a long time. I don’t think anyone can be blamed for thinking Samueli saw – or should have seen – some fairly bizarre behaviour in his associate.

    If Samueli wanted to keep the Ducks in defiance of the NHL, I think he would give up his piece of the team to his wife. She’s a co-owner now. On what basis can she be made to sell?

  8. beingbobbyorr says:

    . . . the pillars of community service and philanthropic work that have made orange county the bastion of wholesome, conservative suburbia it is.

    Is Orange County guilty of not enforcing an Ozzie-n-Harriet lifestyle on all its’ citizens (especially it’s entrepreneurs who only moved there a decade ago, having spent their formative years in/around Los Angeles) or is Rajeev guilty of buying into a media portrait of one community that — to those of us who live or work there — bears little resemblance to reality?

  9. rajeev says:

    having spent many a late night in orange county, often engaged in activities of questionable legality, im well aware of its disconnect between sheen and substance. though admittedly i was not running in nicholas’ circles, subterranean or otherwise.

    i think the better question is how long are people in positions of authority going to be able to lie to and manipulate the public for their own benefit, with media complicity and without significant repercussions? this goes not only for bettman telling us how great a guy samueli is or how ticket prices are going to decline once cost-certainty is achieved, but also for things like shell covering up its involvement in the execution of activists in nigeria or the us govt saying that it supports democracy and self-determination abroad.

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!