Former Microsoft CEO Steve Ballmer is being sued in a dispute involving a longtime Sonics employee, who says the billionaire promised to help pay his debts last year after he’d worked on failed efforts to relocate the NBA’s Sacramento Kings to Seattle.
Thomas Bukowski, a retired scientist from Seattle, last week added Ballmer to a lawsuit filed in October against former Sonics employee Steve Gordon. Bukowski claims he’s owed $10 million from two business deals with Gordon, one of which he says Ballmer is obligated to repay because of promises made to Gordon after the Kings’ relocation was quashed.
The suit details a friendship of 23 years between Gordon — known as “The Hat Man” in NBA and local basketball circles — and one of the nation’s wealthiest men.
Andrew Kinstler, the lawyer representing Ballmer, said Ballmer never hired or paid Gordon to do anything with regards to a professional basketball team and will vigorously oppose the suit.
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Kinstler said the lawsuit’s characterization of the men’s friendship amounts to “gross misrepresentations and a gross misstatement of the facts.’’
“It is sad that what started as a casual friendship between Mr. Gordon and Mr. Ballmer has now turned into a lawsuit against Mr. Ballmer by one of Mr. Gordon’s creditors,’’ Kinstler said. “Mr. Ballmer never agreed to pay Mr. Gordon’s debt, which seems to be the claim that is being made.’’
According to the lawsuit filed in King County Superior Court, Gordon was helping Ballmer with efforts to relocate the Kings in hopes of securing big money and possible minority ownership in a new Seattle franchise. The suit says Gordon had more than $6 million in debts from unrelated business ventures and went to Ballmer in a panic last May after the NBA denied the relocation bid — ending Gordon’s hopes of receiving additional money to repay creditors.
The lawsuit states Ballmer subsequently offered to pay those creditors. It also says Ballmer used his private jet to fly Gordon to the Menninger Clinic, a psychiatric hospital in Texas, to deal with severe depression. It further states that Ballmer’s sister, Shelly, a licensed therapist and personal friend of Gordon’s, accompanied him and checked him into the hospital for a six-week stay last June and July.
But the lawsuit claims Ballmer later reneged on his repayment offer after paying $50,000 to satisfy a lone creditor from a list Gordon gave him.
The initial lawsuit by Bukowski was filed against Gordon and his wife, Megan Lantry, seeking money owed on his two deals. Bukowski applied this month to add Ballmer as a defendant and that process was finalized last week.
Bukowski is suing Ballmer for breach of contract as an interested third party, asking that his offer to Gordon be enforced so creditors on the list get paid.
The list’s largest creditor is Bukowski at $920,000, money he says he gave Gordon in 2008 and 2009 for an investment deal. Bukowski contends he was promised in writing that the investment would today be worth $3 million. Bukowski is seeking $3 million and asks the court to oblige Ballmer to pay it on Gordon’s behalf.
Ballmer has 20 days to file a formal response to the accusations.
Gordon began as a special assignments trainer for the Sonics in 1980 and performed similar jobs until 2004, when he joined the Portland Trail Blazers as a consultant. His “Hat Man” nickname came from former Sonics forward John Johnson, who rarely noticed Gordon without a baseball cap.
Reached for an interview, Gordon said the lawsuit’s depiction of his dealings with Ballmer, including the detail of Gordon’s psychiatric treatment, was accurate.
“Everything in there about Ballmer and me was all true,’’ Gordon said. “It all happened.’’
The suit, filed by Seattle lawyer Bradley Jones of Gordon Thomas Honeywell LLP, also has Bukowski seeking just more than $7 million from Gordon and his wife alone from a separate 2011 deal not on the debt list given Ballmer.
In that second deal, it says Gordon, whose wife worked alongside Bukowski for 18 years in a Seattle science lab, began touting a “special opportunity’’ to make money from a $55 million fund Ballmer was setting him up with. The suit says Gordon claimed the fund was Ballmer’s idea to “create sufficient net worth for Gordon such that Gordon could qualify to become a minority owner of an NBA franchise that Ballmer intended to bring to Seattle.’’
All Gordon needed was $70,000 for legal costs to implement the fund. In return, he’d give Bukowski just more than $7 million once the fund was established.
The suit doesn’t clarify whether Gordon would fully control the fund or exactly why Ballmer would commit such a vast amount. Bukowski gave Gordon the money in 2011 and waited for the promised millions.
But the alleged fund was never established and any hope Gordon had of basketball ownership vanished in May 2013, when the NBA rejected the Kings’ relocation. The suit contends Gordon fell into a depression over his debts and soon after that Ballmer offered to help.
The suit says Ballmer paid for outside lawyer Jeffrey Grant, of the Seattle firm Skellenger Bender, to serve as Gordon’s independent counsel in documenting debts to be repaid.
The suit quotes from a June 3 email from a Ballmer family lawyer, Mark Rising, to Grant: “Steve Ballmer’s consideration of financial assistance to Steve Gordon is conditional upon two things: a) Steve Gordon’s entry into the Menninger Clinic program as soon as possible: and b) Steve Gordon’s complete disclosure to Mr. Ballmer of all details related to his alleged obligations to investors … ’’
Gordon flew to the Menninger Clinic on June 10.
The suit says Ballmer helped pay one creditor, but then, by July 18 “decided to repudiate his agreement with Gordon’’ and not repay remaining debts.
Bukowski sued Gordon three months later.
Gordon, represented now by Seattle lawyer David Otto, declined to comment specifically on Bukowski’s financial allegations.
Geoff Baker: 206-464-8286 or email@example.com.