Belkin: I don’t trust Hawks-Thrashers co-owners

Rockville, Md. — The court debate Wednesday over the value of the Hawks, Thrashers and Philips Arena operating rights was pretty simple — and laced with more raw emotion.

The payout Boston-based co-owner Steve Belkin seeks is too high, the teams’ other owners said.

But Belkin counters it’s not high enough.

The seven other owners, who are trying to buy out Belkin’s 30 percent stake in the teams, argue that $140 million in personal guarantees by the partners need to be subtracted before any math is done on how much the teams are worth.

That amount — which includes $25 million in guarantees required by the NBA and NHL — was included in an original contract when the eight owners bought the teams from Turner Broadcasting System in 2004.

But Belkin testified Wednesday that the teams and arena rights aren’t worth anything less than $500 million. This is why he objected to an appraisal in late 2005 that came in at $288.4 million.

The leagues required the eight owners, known as the Atlanta Spirit, to agree to put up $25 million in so-called personal guarantees because both teams were losing money at the time.

Belkin testified on Tuesday, his first day in court, that the Spirit had a “five-year game plan” to reduce those losses: $15 million in 2004-2005, then $10 million the following season and $5 million after that.

That plan didn’t exactly work out.

The teams and arena lost more than $12 million in 2004-2005, the year of the hockey lockout. Those losses doubled to more than $24 million during the following season, court filings have said.

The owners have been shoveling money into the teams, but Belkin, as part of the buyout agreement, hasn’t had to contribute money and maintains his 30-percent stake.

Belkin also made it clear Wednesday he didn’t trust his seven other business partners.

The lack of faith is why, he said, he didn’t pick up the phone to discuss choosing a new appraiser to determine the value of the teams when they didn’t like the value set by CitiGroup Private Bank.

He slapped a lawsuit on them instead.

The owners have been embroiled in a three-year legal battle over the process for determining how much they should pay Belkin for his stake in the teams. The contract that spelled out the process is so vague that they can’t agree on a process or a price.

Belkin, who lives in Boston, got to choose the first appraiser. Whichever side objected to that value got to choose the second.

Both sides objected, but the contract didn’t say where to go from there.

Belkin testified he thought it was best to go to court.

The case is in Maryland because the owners previously agreed to litigate there. The trial is expected to last through next week.

Rob Remar, an attorney representing the seven other partners, asked why Belkin moved so quickly to file a lawsuit, which he did four hours after they received an appraisal from CitiGroup.

“I had objected first, I had become the objecting party. At that time I did not trust any of the actions by any of the defendants,” Belkin said.

So, a phone call was out of the question, Remar asked.

“We wanted to get the help of the court to make sure this valuation process was completed,” Belkin replied.

Remar continued to press Belkin on why he filed a lawsuit.

“You said you wanted to get the help of the court. Did you ever go to the court to say, “Judge can you get us a declaration?”

Belkin deferred that question to his lawyers.

Remar asked the question again.

“My understanding is that we asked for the court’s help to stop the defendants from interfering,” Belkin said. “I didn’t believe anything that the defendants said.”