1984 agreement at issue in Broncos ownership trial
Did the 1984 sale of the Denver Broncos to its late owner, Pat Bowlen, give the former owner’s company the right to intervene before the team changes hands yet again?
On Wednesday, the fate of the successful football franchise was mired in contractual language from 37 years ago, as attorneys for PDB Sports (owner of the Broncos) and ROFR Holdings, the company of former owner Edgar Kaiser, put the sale agreement between Bowlen and Kaiser under a microscope.
Appearing virtually on the witness stand was Martin Lambert, who represented Bowlen during the weeklong purchase negotiations in March of 1984, when Lambert was an attorney with the Canadian firm Bennett Jones.
“It was a huge deal for me. It had the potential to be — and ultimately turned out to be — very important for my own personal career and management in the firm,” said Lambert, now retired, adding that the sale was “a significant, high-profile matter.”
The Associated Press reported that ROFR Holdings, the corporation Kaiser established in 2005, argues it has the right to match any offer if the team is sold, given that it is responsible for Kaiser’s remaining portion. (ROFR stands for Right of First Refusal.)
PDB Sports’ position is that Kaiser’s stake terminated when he died in 2012. The Broncos’ franchise is reportedly worth $3.75 billion.
Lambert described the 1984 contract as “heavily negotiated,” describing sessions that ran until 2 or 3 a.m. In particular, Section 6.06 of the agreement covered the rights of the parties’ “successors and assigns.” Lambert said the contract was changed in Bowlen’s favor to prohibit the transfer of Kaiser’s rights.
“If you had wanted to ensure that the obligations of Mr. Bowlen or the rights of Mr. Kaiser flowed to their estate upon their death, what would the word you would have used been?” asked John McHugh, attorney for PDB Sports.
“I would’ve included specific reference to his heirs and also to his estate,” Lambert responded.
The trial is scheduled for seven days before Denver District Court Judge Shelley I. Gilman, who will be responsible for issuing a ruling. If she decides no right of first refusal exists for ROFR Holdings, it will clear a hurdle to cementing new ownership for the team, The Denver Post reports.
Kaiser previously sued Bowlen twice while both men were alive, asserting the right of first refusal, and lost on both occasions.
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