Suns Minority Owners Challenge Ishbia's Majority Stake in Court
In a recent legal development, a lawsuit filed by two minority owners of the Phoenix Suns, Scott Seldin and Andy Kohlberg, has revealed a potential threat to Mat Ishbia's majority ownership of the team. The lawsuit, which was partially unredacted, highlights financial discrepancies and alleged misconduct, sparking a heated debate in the NBA.
The legal action, initiated in November 2025, accuses Ishbia of financial misconduct, including the use of the team as a personal financial vehicle. This comes as a surprise to many, given Ishbia's acquisition of the Suns in 2023 for a substantial $2.28 billion. The minority owners claim that Ishbia's actions have unfairly diluted their ownership interests.
The dispute began in September 2024 when Kohlberg initiated buyout negotiations with an Ishbia advisor. Seldin, however, chose not to pursue a buyout. The negotiations continued into 2025, with Kohlberg requesting a response from Ishbia by June 1. The following day, Ishbia organized a $250 million capital call raise, demanding that minority owners contribute by June 12. The minority owners, under protest, complied, but this was just the beginning of their legal troubles.
According to the unredacted filing, Ishbia later scheduled another capital call raise on July 8, with a 10-day deadline. Seldin and Kohlberg again paid their share under protest. The minority owners then sought internal financial records, leading to an August lawsuit against Ishbia. They were shown a one-page document suggesting a debt-to-equity conversion, but later discovered Ishbia's failure to fund both raises by his own deadlines.
The filing reveals that Ishbia's scheme resulted in the minority owners funding approximately 38% of the capital call, despite holding only 13% of the company's ownership. Under the team's operating agreement, Seldin and Kohlberg argue they should have been able to purchase the shares Ishbia failed to fund. This could potentially lead to a significant dilution of Ishbia's ownership stake, from 83.2% to 32.7%.
The legal battle's outcome hinges on the judge's decision regarding Ishbia's funding of the capital call. If the judge rules in favor of the minority owners, Ishbia's majority ownership could be at risk, allowing Seldin and Kohlberg to potentially take over with a 60% stake. However, Ishbia's spokesman dismisses the claims, accusing the minority owners of refusing to invest and resorting to threats and publicity stunts.
This lawsuit marks the seventh filed against the Suns since November 2024, with others involving current or former employees alleging discrimination, retaliation, harassment, and wrongful termination. The Suns have maintained their position, denying any obligation to buy out Seldin and Kohlberg, as revealed in an August letter obtained by ESPN.
