Pablo Torre: Kawhi/Clippers/Ballmer/Aspiration Thread (part 2)

[CS707]

Kawhi did not break the law..

Does that still apply if it's proven he knowingly accepted the money for the purpose of salary cap circumvention with no intent of providing services? Serious question. That seems like conspiracy to commit fraud but I'm not expert either

[WarriorGM]

You literally have no idea what you’re talking about. Sponsorship has nothing to do with commercials unless contractually obligated. Kawhi Leonard has no relation to the investors.

There is nothing fraudulent about transferring money in exchange for sponsorship.

It’s like saying the investors should go after the raw material suppliers that supplied steel to a bankrupt company, there is nothing to go after for the supplier the entire liability is on the company. Making a bad investment is legal. Fraud is not, but unless some kind of conspiracy exists to show that Kawhi coerced the CEO to defraud investors to sponsor him (which is absolutely insane and has 0 proof) you’re grasping at nothing.

Investors cannot go after third parties, only the people they directly did business with.

Leonard did nothing for tens of millions of dollars. He undertook no action to actually promote the company. To use your analogy, it's as if after a steel company went bankrupt, the creditors and investors discovered a coal company had been paid tens of millions of dollars in the two years leading up to the bankruptcy, never supplied a single piece of coal, and kept getting paid anyway.

I promise you that the US bankruptcy code treats the payments to Leonard as fraudulent transfers. You can't just say the word "sponsorship" any more than you can use the word "consulting" and avoid legal liability. You either provide a service that conveyed value, or not. You're employing some Always Sunny in Philadelphia reasoning here.

The term "fraudulent transfer" is usually understood to mean moving assets to shield them from creditors. At least, that is how it is used in the legal world and under the Uniform Fraudulent Transfers Act. UFTA claims are state law but the Bankruptcy Code follows the same principles. Fraudulent transfers are intended to allow the debtor to keep the funds by disguising ownership in another individual or entity. That is not what happened with Aspiration and Kawhi. Kawhi expected to keep the money. But as I said in my post above, to prove fraud you have to show actionable deceit. I certainly agree the trustee could pursue an adversary proceeding if the evidence proved fraud. But what was the deceit? In California, there are 4 kinds of fraud: (1) intentional misrepresentation, (2) negligent misrepresentation, (3) concealment, and (4) false promise. Which of these did Kawhi do? The Aspiration CEO breached his fiduciary duties and defrauded the company's investors. I just don't see the remedy against Kawhi.

I am no fan of Kawhi. But Aspiration filed BK on March 30, 2025. The trustee has a duty to pursue all claims that could recover money for the estate. No adversary proceeding has been filed. I think that speaks volumes.

If I was any of the other creditors of Aspiration I could see how portraying Aspiration's CEO, Ballmer, and Kawhi conspired to take out $28 million from the company on a bogus sponsorship might make sense. Why wouldn't it be intentional misrepresentation or false promise if there was no intention on Kawhi's part to actually show up for sponsorship duties? If the idea isn't clear, substitute Ballmer and Kawhi with the CEO's relatives.

The thing that makes me think the trustee might not be pursuing this is that Ballmer as I understand it may have increased his exposure to the bankruptcy to get this Kawhi deal done and is on paper ending up a bigger loser.

Believable there was a conspiracy to transfer funds to Kawhi surreptitiously but unlikely there was conspiracy to intentionally defraud other creditors and investors.

[Larry Ellison]

Kawhi did not break the law..

Does that still apply if it's proven he knowingly accepted the money for the purpose of salary cap circumvention with no intent of providing services? Serious question. That seems like conspiracy to commit fraud but I'm not expert either

Hard to prove. But let's assume it could be proven. Conspiracy to circumvent the cap isn't fraud. Fraud is when you induce someone to take action in reliance on your deceit, and they are damaged. There are other elements like whether the reliance is reasonable, but I am trying to keep it short. The point here is that conspiring to circumvent the cap and conspiring to defraud Aspiration investors are two different things. I don't know if there is a remedy in the CBA for the league to take action against players that are complicit in a team's efforts to circumvent the cap. I know the legal world but I am not an expert on the CBA so maybe other posters can speak on that issue.

Conspiring to circumvent the NBA salary cap is not a violation of any law that I am aware of.

[Larry Ellison]

Leonard did nothing for tens of millions of dollars. He undertook no action to actually promote the company. To use your analogy, it's as if after a steel company went bankrupt, the creditors and investors discovered a coal company had been paid tens of millions of dollars in the two years leading up to the bankruptcy, never supplied a single piece of coal, and kept getting paid anyway.

I promise you that the US bankruptcy code treats the payments to Leonard as fraudulent transfers. You can't just say the word "sponsorship" any more than you can use the word "consulting" and avoid legal liability. You either provide a service that conveyed value, or not. You're employing some Always Sunny in Philadelphia reasoning here.

The term "fraudulent transfer" is usually understood to mean moving assets to shield them from creditors. At least, that is how it is used in the legal world and under the Uniform Fraudulent Transfers Act. UFTA claims are state law but the Bankruptcy Code follows the same principles. Fraudulent transfers are intended to allow the debtor to keep the funds by disguising ownership in another individual or entity. That is not what happened with Aspiration and Kawhi. Kawhi expected to keep the money. But as I said in my post above, to prove fraud you have to show actionable deceit. I certainly agree the trustee could pursue an adversary proceeding if the evidence proved fraud. But what was the deceit? In California, there are 4 kinds of fraud: (1) intentional misrepresentation, (2) negligent misrepresentation, (3) concealment, and (4) false promise. Which of these did Kawhi do? The Aspiration CEO breached his fiduciary duties and defrauded the company's investors. I just don't see the remedy against Kawhi.

I am no fan of Kawhi. But Aspiration filed BK on March 30, 2025. The trustee has a duty to pursue all claims that could recover money for the estate. No adversary proceeding has been filed. I think that speaks volumes.

If I was any of the other creditors of Aspiration I could see how portraying Aspiration's CEO, Ballmer, and Kawhi conspired to take out $28 million from the company on a bogus sponsorship might make sense. Why wouldn't it be intentional misrepresentation or false promise if there was no intention on Kawhi's part to actually show up for sponsorship duties? If the idea isn't clear, substitute Ballmer and Kawhi with the CEO's relatives.

The thing that makes me think the trustee might not be pursuing this is that Ballmer as I understand it may have increased his exposure to the bankruptcy to get this Kawhi deal done and is on paper ending up a bigger loser.

Why is it bogus? The law protects freedom of contract, even when the terms are lopsided. I don't think the facts show false promise. If Kawhi had promised to show up, then didn't, maybe. He never promised that. Kawhi/Uncle Dennis were transparent about what they wanted. Aspiration should have said no. It didn't. The wrongdoing was by Aspiration CEO.

[jbk1234]

You literally have no idea what you’re talking about. Sponsorship has nothing to do with commercials unless contractually obligated. Kawhi Leonard has no relation to the investors.

There is nothing fraudulent about transferring money in exchange for sponsorship.

It’s like saying the investors should go after the raw material suppliers that supplied steel to a bankrupt company, there is nothing to go after for the supplier the entire liability is on the company. Making a bad investment is legal. Fraud is not, but unless some kind of conspiracy exists to show that Kawhi coerced the CEO to defraud investors to sponsor him (which is absolutely insane and has 0 proof) you’re grasping at nothing.

Investors cannot go after third parties, only the people they directly did business with.

Leonard did nothing for tens of millions of dollars. He undertook no action to actually promote the company. To use your analogy, it's as if after a steel company went bankrupt, the creditors and investors discovered a coal company had been paid tens of millions of dollars in the two years leading up to the bankruptcy, never supplied a single piece of coal, and kept getting paid anyway.

I promise you that the US bankruptcy code treats the payments to Leonard as fraudulent transfers. You can't just say the word "sponsorship" any more than you can use the word "consulting" and avoid legal liability. You either provide a service that conveyed value, or not. You're employing some Always Sunny in Philadelphia reasoning here.

The term "fraudulent transfer" is usually understood to mean moving assets to shield them from creditors. At least, that is how it is used in the legal world and under the Uniform Fraudulent Transfers Act. UFTA claims are state law but the Bankruptcy Code follows the same principles. Fraudulent transfers are intended to allow the debtor to keep the funds by disguising ownership in another individual or entity. That is not what happened with Aspiration and Kawhi. Kawhi expected to keep the money. But as I said in my post above, to prove fraud you have to show actionable deceit. I certainly agree the trustee could pursue an adversary proceeding if the evidence proved fraud. But what was the deceit? In California, there are 4 kinds of fraud: (1) intentional misrepresentation, (2) negligent misrepresentation, (3) concealment, and (4) false promise. Which of these did Kawhi do? The Aspiration CEO breached his fiduciary duties and defrauded the company's investors. I just don't see the remedy against Kawhi.

I am no fan of Kawhi. But Aspiration filed BK on March 30, 2025. The trustee has a duty to pursue all claims that could recover money for the estate. No adversary proceeding has been filed. I think that speaks volumes.

I would encourage you to read 11 USC 58(b).

That aside, the actionable deceit here is that Ballmer made what appeared, to other investors and creditors, to be an investment in the company. It was in fact a payment to Leonard using the company as a shell. The company wasn't really getting the money. It couldn't use that money because it was going to Leonard. I would encourage you to read CA penal code section 182. Anyone who undertakes an overtime act, e.g. taking corporate funds for nothing, is liable.

[Larry Ellison]

Leonard did nothing for tens of millions of dollars. He undertook no action to actually promote the company. To use your analogy, it's as if after a steel company went bankrupt, the creditors and investors discovered a coal company had been paid tens of millions of dollars in the two years leading up to the bankruptcy, never supplied a single piece of coal, and kept getting paid anyway.

I promise you that the US bankruptcy code treats the payments to Leonard as fraudulent transfers. You can't just say the word "sponsorship" any more than you can use the word "consulting" and avoid legal liability. You either provide a service that conveyed value, or not. You're employing some Always Sunny in Philadelphia reasoning here.

The term "fraudulent transfer" is usually understood to mean moving assets to shield them from creditors. At least, that is how it is used in the legal world and under the Uniform Fraudulent Transfers Act. UFTA claims are state law but the Bankruptcy Code follows the same principles. Fraudulent transfers are intended to allow the debtor to keep the funds by disguising ownership in another individual or entity. That is not what happened with Aspiration and Kawhi. Kawhi expected to keep the money. But as I said in my post above, to prove fraud you have to show actionable deceit. I certainly agree the trustee could pursue an adversary proceeding if the evidence proved fraud. But what was the deceit? In California, there are 4 kinds of fraud: (1) intentional misrepresentation, (2) negligent misrepresentation, (3) concealment, and (4) false promise. Which of these did Kawhi do? The Aspiration CEO breached his fiduciary duties and defrauded the company's investors. I just don't see the remedy against Kawhi.

I am no fan of Kawhi. But Aspiration filed BK on March 30, 2025. The trustee has a duty to pursue all claims that could recover money for the estate. No adversary proceeding has been filed. I think that speaks volumes.

I would encourage you to read 11 USC 58(b).

That aside, the actionable deceit here is that Ballmer made what appeared, to other investors and creditors, to be an investment in the company. It was in fact a payment to Leonard using the company as a shell. The company wasn't really getting the money. It couldn't use that money because it was going to Leonard. I would encourage you to read CA penal code section 182. Anyone who undertakes an overtime act, e.g. taking corporate funds for nothing, is liable.

Do you mean 11 USC 548? Are you saying that it was Ballmer, rather than Kawhi, who committed the fraud? I would love it if that could be proven. It's a different theory than saying Kawhi was the fraudster. Penal Code 182 just articulates general principles of what it means to be in a conspiracy. As I understand it, you are saying that Kawhi taking money was an overt act in furtherance of a conspiracy to defraud. I am not sure I agree. But it is an interesting theory. To really unpack this we would have to drill down into what it means to take an overt act. I am not sure the rest of the Board cares about that discussion. Do you agree the BK trustee in the Aspiration case is competent? Why haven't they pursued this?

If I'm misunderstanding your point, I welcome clarification.

[jbk1234]

The term "fraudulent transfer" is usually understood to mean moving assets to shield them from creditors. At least, that is how it is used in the legal world and under the Uniform Fraudulent Transfers Act. UFTA claims are state law but the Bankruptcy Code follows the same principles. Fraudulent transfers are intended to allow the debtor to keep the funds by disguising ownership in another individual or entity. That is not what happened with Aspiration and Kawhi. Kawhi expected to keep the money. But as I said in my post above, to prove fraud you have to show actionable deceit. I certainly agree the trustee could pursue an adversary proceeding if the evidence proved fraud. But what was the deceit? In California, there are 4 kinds of fraud: (1) intentional misrepresentation, (2) negligent misrepresentation, (3) concealment, and (4) false promise. Which of these did Kawhi do? The Aspiration CEO breached his fiduciary duties and defrauded the company's investors. I just don't see the remedy against Kawhi.

I am no fan of Kawhi. But Aspiration filed BK on March 30, 2025. The trustee has a duty to pursue all claims that could recover money for the estate. No adversary proceeding has been filed. I think that speaks volumes.

I would encourage you to read 11 USC 58(b).

That aside, the actionable deceit here is that Ballmer made what appeared, to other investors and creditors, to be an investment in the company. It was in fact a payment to Leonard using the company as a shell. The company wasn't really getting the money. It couldn't use that money because it was going to Leonard. I would encourage you to read CA penal code section 182. Anyone who undertakes an overtime act, e.g. taking corporate funds for nothing, is liable.

Do you mean 11 USC 548? Are you saying that it was Ballmer, rather than Kawhi, who committed the fraud? I would love it if that could be proven. It's a different theory than saying Kawhi was the fraudster. Penal Code 182 just articulates general principles of what it means to be in a conspiracy.

If I'm misunderstanding your point, I welcome clarification.

Yes, I meant 548. The bankruptcy code cares very much whether certain creditors get preferential treatment before the music stops. If Ballmer committed fraud, so did Leonard as the co-consprator who took the money. Taking the money is the 2nd overt act in furtherance of the conspiracy. Ballmer providing the investment is the first. I suppose they could both assert that they did it to defraud the league, and not the other nvestors or creditors, but that doesn't strike me as a particularly good defense.

[Godymas]

Except there was no commercial and Leonard never had any intention of making a commercial. That's what makes the transfer of tens of millions of dollars in corporate assets to Leonard, fraudulent.

If you're an investor who actually did provide value to the company, your equity is gone and you have a claim. If you're a creditor who actually did provide goods or services to company and got stiffed, you have a claim. All those fraudulent transfer claims belong to the bankruptcy estate now and can be brought by the trustee.

If I'm the trustee I'm bringing an adversary proceeding against Leonard, Ballmer, and the company board members who signed off the transaction and waiting for Ballmer to write a very big check to make it all go away.

You literally have no idea what you’re talking about. Sponsorship has nothing to do with commercials unless contractually obligated. Kawhi Leonard has no relation to the investors.

There is nothing fraudulent about transferring money in exchange for sponsorship.

It’s like saying the investors should go after the raw material suppliers that supplied steel to a bankrupt company, there is nothing to go after for the supplier the entire liability is on the company. Making a bad investment is legal. Fraud is not, but unless some kind of conspiracy exists to show that Kawhi coerced the CEO to defraud investors to sponsor him (which is absolutely insane and has 0 proof) you’re grasping at nothing.

Investors cannot go after third parties, only the people they directly did business with.

Leonard did nothing for tens of millions of dollars. He undertook no action to actually promote the company. To use your analogy, it's as if after a steel company went bankrupt, the creditors and investors discovered a coal company had been paid tens of millions of dollars in the two years leading up to the bankruptcy, never supplied a single piece of coal, and kept getting paid anyway.

I promise you that the US bankruptcy code treats the payments to Leonard as fraudulent transfers. You can't just say the word "sponsorship" any more than you can use the word "consulting" and avoid legal liability. You either provide a service that conveyed value, or not. You're employing some Always Sunny in Philadelphia reasoning here.

Nope, you can literally just hand money out. You don’t know what the details of the sponsorship agreement were. You can pay an insurance company for years to “cover you” when realistically they do nothing. There is nothing fraudulent about being stupid with money.

[Larry Ellison]

I would encourage you to read 11 USC 58(b).

That aside, the actionable deceit here is that Ballmer made what appeared, to other investors and creditors, to be an investment in the company. It was in fact a payment to Leonard using the company as a shell. The company wasn't really getting the money. It couldn't use that money because it was going to Leonard. I would encourage you to read CA penal code section 182. Anyone who undertakes an overtime act, e.g. taking corporate funds for nothing, is liable.

Do you mean 11 USC 548? Are you saying that it was Ballmer, rather than Kawhi, who committed the fraud? I would love it if that could be proven. It's a different theory than saying Kawhi was the fraudster. Penal Code 182 just articulates general principles of what it means to be in a conspiracy.

If I'm misunderstanding your point, I welcome clarification.

Yes, I meant 548. The bankruptcy code cares very much whether certain creditors get preferential treatment before the music stops. If Ballmer committed fraud, so did Leonard as the co-consprator who took the money. Taking the money is the 2nd overt act in furtherance of the conspiracy. Ballmer providing the investment is the first. I suppose they could both assert that they did it to defraud the league, and not the other nvestors or creditors, but that doesn't strike me as a particularly good defense.

I edited my above response to clarify. In any event, preferential transfers are a different issue. As I understand it, and I'm not a BK lawyer but have handled a couple adversary proceedings within BK, any payments within 90 days of the BK filing are preferential transfers and can be clawed back, whether fraudulent or not. I like your creativity, but I think it would be hard to prove. The reasons why are probably beyond the scope of what can be discussed on this Board.

[badpotato]

Kawhi did not break the law..

Does that still apply if it's proven he knowingly accepted the money for the purpose of salary cap circumvention with no intent of providing services? Serious question. That seems like conspiracy to commit fraud but I'm not expert either

Hard to prove. But let's assume it could be proven. Conspiracy to circumvent the cap isn't fraud. Fraud is when you induce someone to take action in reliance on your deceit, and they are damaged. There are other elements like whether the reliance is reasonable, but I am trying to keep it short. The point here is that conspiring to circumvent the cap and conspiring to defraud Aspiration investors are two different things. I don't know if there is a remedy in the CBA for the league to take action against players that are complicit in a team's efforts to circumvent the cap. I know the legal world but I am not an expert on the CBA so maybe other posters can speak on that issue.

Conspiring to circumvent the NBA salary cap is not a violation of any law that I am aware of.

Article 13 Section 1b:
It shall constitute a violation of Section 1(a) above for a Team (or Team Affiliate) to enter into an agreement or understanding with any sponsor or business partner or third party under which such sponsor, business partner, or third party pays or agrees to pay compensation for basketball services (even if such compensation is ostensibly designated as being for non-basketball services) to a player under Contract to the Team.

Such an agreement with a sponsor or business partner or third party may be inferred where: (i) such compensation from the sponsor or business partner
or third party is substantially in excess of the fair market value of any services to be rendered by the player for such sponsor or business partner or third
party; and (ii) the Compensation in the Player Contract between the player and the Team is substantially below the fair market value of such Contract.

Good chances Aspiration fiasco will be ruled as violation here - penalty to the player according to the same CBA is voiding his contract.

Upon a finding of a violation of Section 1 by the System Arbitrator, but only following the conclusion of any appeal to the Appeals
Panel, the Commissioner shall be authorized to: void any Player Contract, or any Renegotiation, Extension, or amendment of a Player Contract, between any player and any Team when both the player (or any person or entity acting with authority on behalf of such player) and the Team (or Team Affiliate) are found to have committed such violation; and/or void any other transaction or agreement found to have violated Section 1

Every other penalty in CBA is on the team side - so unless they will find a way to punish Kawhi using different article(which would be a big stretch, as XIII covers the situation sufficiently), they are forced to either go nuclear or let him off the hook entirely.

[jbk1234]

You literally have no idea what you’re talking about. Sponsorship has nothing to do with commercials unless contractually obligated. Kawhi Leonard has no relation to the investors.

There is nothing fraudulent about transferring money in exchange for sponsorship.

It’s like saying the investors should go after the raw material suppliers that supplied steel to a bankrupt company, there is nothing to go after for the supplier the entire liability is on the company. Making a bad investment is legal. Fraud is not, but unless some kind of conspiracy exists to show that Kawhi coerced the CEO to defraud investors to sponsor him (which is absolutely insane and has 0 proof) you’re grasping at nothing.

Investors cannot go after third parties, only the people they directly did business with.

Leonard did nothing for tens of millions of dollars. He undertook no action to actually promote the company. To use your analogy, it's as if after a steel company went bankrupt, the creditors and investors discovered a coal company had been paid tens of millions of dollars in the two years leading up to the bankruptcy, never supplied a single piece of coal, and kept getting paid anyway.

I promise you that the US bankruptcy code treats the payments to Leonard as fraudulent transfers. You can't just say the word "sponsorship" any more than you can use the word "consulting" and avoid legal liability. You either provide a service that conveyed value, or not. You're employing some Always Sunny in Philadelphia reasoning here.

Nope, you can literally just hand money out. You don’t know what the details of the sponsorship agreement were. You can pay an insurance company for years to “cover you” when realistically they do nothing. There is nothing fraudulent about being stupid with money.

You're clearly not an attorney and you don't know what you're talking about. The board members have fiduciary duties to the investors. They have statutory duties to creditors once they know, or should know, the company is at risk of insolvency. You very much cannot just hand out the company's money because it's not your money.

[Larry Ellison]

Leonard did nothing for tens of millions of dollars. He undertook no action to actually promote the company. To use your analogy, it's as if after a steel company went bankrupt, the creditors and investors discovered a coal company had been paid tens of millions of dollars in the two years leading up to the bankruptcy, never supplied a single piece of coal, and kept getting paid anyway.

I promise you that the US bankruptcy code treats the payments to Leonard as fraudulent transfers. You can't just say the word "sponsorship" any more than you can use the word "consulting" and avoid legal liability. You either provide a service that conveyed value, or not. You're employing some Always Sunny in Philadelphia reasoning here.

Nope, you can literally just hand money out. You don’t know what the details of the sponsorship agreement were. You can pay an insurance company for years to “cover you” when realistically they do nothing. There is nothing fraudulent about being stupid with money.

You're clearly not an attorney and you don't know what you're talking about. The board members have fiduciary duties to the investors. They have statutory duties to creditors once they know, or should know, the company is at risk of insolvency. You very much cannot just hand out the company's money because it's not your money.

I agree with this. No question fiduciary duties were breached.

[jbk1234]

Nope, you can literally just hand money out. You don’t know what the details of the sponsorship agreement were. You can pay an insurance company for years to “cover you” when realistically they do nothing. There is nothing fraudulent about being stupid with money.

You're clearly not an attorney and you don't know what you're talking about. The board members have fiduciary duties to the investors. They have statutory duties to creditors once they know, or should know, the company is at risk of insolvency. You very much cannot just hand out the company's money because it's not your money.

I agree with this. No question fiduciary duties were breached.

Why was it in the company's interest to just give Leonard money?

[JonFromVA]

Nope, you can literally just hand money out. You don’t know what the details of the sponsorship agreement were. You can pay an insurance company for years to “cover you” when realistically they do nothing. There is nothing fraudulent about being stupid with money.

You're clearly not an attorney and you don't know what you're talking about. The board members have fiduciary duties to the investors. They have statutory duties to creditors once they know, or should know, the company is at risk of insolvency. You very much cannot just hand out the company's money because it's not your money.

I agree with this. No question fiduciary duties were breached.

If a thief steals a diamond, and then turns around and gives it to someone else as a gift or payment for services (doesn't matter) the police can reclaim the diamond and return it to the owner. Right?

Whether the recipient is charged with a crime would depend whether they knowingly accepted stolen merchandise. Right?

So if fraud has already been established, why wouldn't prosecutors be trying to clawback whatever money was paid to Kawhi? And if they can dig up any evidence of conspiracy on his part, wouldn't his shell companies be at risk of falling apart leaving him personally liable?

[Deivork]

So season has begun, no consenquence for either Kawhi or the Clippers? Kinda lame.

[Mavrelous]

You're clearly not an attorney and you don't know what you're talking about. The board members have fiduciary duties to the investors. They have statutory duties to creditors once they know, or should know, the company is at risk of insolvency. You very much cannot just hand out the company's money because it's not your money.

I agree with this. No question fiduciary duties were breached.

If a thief steals a diamond, and then turns around and gives it to someone else as a gift or payment for services (doesn't matter) the police can reclaim the diamond and return it to the owner. Right?

Whether the recipient is charged with a crime would depend whether they knowingly accepted stolen merchandise. Right?

So if fraud has already been established, why wouldn't prosecutors be trying to clawback whatever money was paid to Kawhi? And if they can dig up any evidence of conspiracy on his part, wouldn't his shell companies be at risk of falling apart leaving him personally liable?

They should, and the original filing was done in a way that protects Kawhi, but someone tipped Pablo, and once the story got public, the filing changed and now Kawhi is exposed to demands to give back the money, but they will try to protect him.

[Godymas]

Leonard did nothing for tens of millions of dollars. He undertook no action to actually promote the company. To use your analogy, it's as if after a steel company went bankrupt, the creditors and investors discovered a coal company had been paid tens of millions of dollars in the two years leading up to the bankruptcy, never supplied a single piece of coal, and kept getting paid anyway.

I promise you that the US bankruptcy code treats the payments to Leonard as fraudulent transfers. You can't just say the word "sponsorship" any more than you can use the word "consulting" and avoid legal liability. You either provide a service that conveyed value, or not. You're employing some Always Sunny in Philadelphia reasoning here.

Nope, you can literally just hand money out. You don’t know what the details of the sponsorship agreement were. You can pay an insurance company for years to “cover you” when realistically they do nothing. There is nothing fraudulent about being stupid with money.

You're clearly not an attorney and you don't know what you're talking about. The board members have fiduciary duties to the investors. They have statutory duties to creditors once they know, or should know, the company is at risk of insolvency. You very much cannot just hand out the company's money because it's not your money.

I don't know what I'm talking about? You don't understand why people incorporate, it's to protect their personal assets. In America's financial system, you only lose what you put in. If Aspiration paid a consultant $1 million dollars for some powerpoints, how is that any different. The deliverable is the powerpoint, unfortunately for the investors you cannot liquidate the asset of a powerpoint for the same market value in return, but that company that delivered the powerpoint won't be expected to pay something back because they have a rightful deliverable and there is no proof of coercion or any sort of under the table deal that led to them paying for this. In this case the deliverable for Kawhi Leonard as a sports media figure was simply his endorsement, yes that's how the world works.

With the Kawhi Leonard situation you are insinuating that there was some under the table deal for Kawhi Leonard to be paid less in the NBA for more money, mind you he's currently making 35% of the salary cap aka he is NOT being underpaid at all in the NBA, he's actually making exactly what he should. That alone is enough to rule out the notion of an "under the table deal" I scratch yours you scratch because where the hell is the benefit for Ballmer, other than retaining Kawhi Leonard on a supermax extension. The idea that Ballmer invested money into this company just for it to get funneled back to Leonard is ABSURD.

The company paid $300 million to the Clippers as part of partnership for the Intuit Dome, it's natural that they would also sponsor the highest paid player.

Thank you, because I've now read the article from ESPN that shares more details and am now even less convinced that there was any aspect of Kawhi doing something wrong. When you look at the names of people that invested into this company it is so clear that this was a massive LA network event of people who were hopping what they believed was a good idea. The CEO stated there were obligations that Kawhi Leonard had to meet as part of his sponsorship with this company, the fact that the company went under basically frees Kawhi's of those obligations, clearly they never got around to enforcing them.

The fraud of Sanberg, it sucks that it happened, and Sanberg can be federally charged, anyone who assisted Sanberg can be federally charged and potentially held somewhat liable for what they defrauded. The entire Board will not be held liable to creditors, employees will not be held liable to creditors, that's how the justice system works, one person's wrong doing will not screw over an entire group of people, which is part of what allows America to have a good business environment.

[Johnny Bball]

So season has begun, no consenquence for either Kawhi or the Clippers? Kinda lame.

How long is Silver going to keep delaying a decision here? Does he think it will just go away? Unless the investigation expanded to a bunch of other violations, you would think this should have been over long ago.

[jbk1234]

Nope, you can literally just hand money out. You don’t know what the details of the sponsorship agreement were. You can pay an insurance company for years to “cover you” when realistically they do nothing. There is nothing fraudulent about being stupid with money.

You're clearly not an attorney and you don't know what you're talking about. The board members have fiduciary duties to the investors. They have statutory duties to creditors once they know, or should know, the company is at risk of insolvency. You very much cannot just hand out the company's money because it's not your money.

I don't know what I'm talking about? You don't understand why people incorporate, it's to protect their personal assets. In America's financial system, you only lose what you put in. If Aspiration paid a consultant $1 million dollars for some powerpoints, how is that any different. The deliverable is the powerpoint, unfortunately for the investors you cannot liquidate the asset of a powerpoint for the same market value in return, but that company that delivered the powerpoint won't be expected to pay something back because they have a rightful deliverable and there is no proof of coercion or any sort of under the table deal that led to them paying for this. In this case the deliverable for Kawhi Leonard as a sports media figure was simply his endorsement, yes that's how the world works.

With the Kawhi Leonard situation you are insinuating that there was some under the table deal for Kawhi Leonard to be paid less in the NBA for more money, mind you he's currently making 35% of the salary cap aka he is NOT being underpaid at all in the NBA, he's actually making exactly what he should. That alone is enough to rule out the notion of an "under the table deal" I scratch yours you scratch because where the hell is the benefit for Ballmer, other than retaining Kawhi Leonard on a supermax extension. The idea that Ballmer invested money into this company just for it to get funneled back to Leonard is ABSURD.

The company paid $300 million to the Clippers as part of partnership for the Intuit Dome, it's natural that they would also sponsor the highest paid player.

Thank you, because I've now read the article from ESPN that shares more details and am now even less convinced that there was any aspect of Kawhi doing something wrong. When you look at the names of people that invested into this company it is so clear that this was a massive LA network event of people who were hopping what they believed was a good idea. The CEO stated there were obligations that Kawhi Leonard had to meet as part of his sponsorship with this company, the fact that the company went under basically frees Kawhi's of those obligations, clearly they never got around to enforcing them.

The fraud of Sanberg, it sucks that it happened, and Sanberg can be federally charged, anyone who assisted Sanberg can be federally charged and potentially held somewhat liable for what they defrauded. The entire Board will not be held liable to creditors, employees will not be held liable to creditors, that's how the justice system works, one person's wrong doing will not screw over an entire group of people, which is part of what allows America to have a good business environment.

I sincerely hope that no one who is reading this comes away with the impression that you have a reliable understanding of the law. If they do, and act on it, they're going to need as many attorneys as Leonard and Ballmer. You've invented, from whole cloth, some version of corporate sponsorship that permits the officers and board members to breach their fiduciary duties to investors without consequence.

Also, the company didn't actually pay $300M to the Clippers. They agreed to pay the Clippers over a very long time.

[Larry Ellison]

You're clearly not an attorney and you don't know what you're talking about. The board members have fiduciary duties to the investors. They have statutory duties to creditors once they know, or should know, the company is at risk of insolvency. You very much cannot just hand out the company's money because it's not your money.

I agree with this. No question fiduciary duties were breached.

Why was it in the company's interest to just give Leonard money?

Why are you asking me this question? I will answer ... on the surface any company would benefit from an endorsement deal. The terms are lopsided. They suggest a breach of fiduciary duty. If the contract with Kawhi was drafted in a more reasonable manner nobody would question it.