Ross Perot, Jr. has sued Mark Cuban in state court in Texas over the financial management of the Dallas Mavericks, asserting that the basketball team is effectively insolvent and lacks the revenue to pay its debts. Perot sold control of the team to Cuban in 2000 for $285 million, but keep hold of a small stake. Perot claims that under Cuban’s control the Dallas Mavericks he has piled up $273 million in losses and accumulated more than $200 million in debt. Perot wants the court to name a receiver to take over the team, and appoint forensic accounts to investigate the team’s finances. More specifically, Perot says the team lost more than $50 million in the June 2009 fiscal year, and that it has had a net cash flow deficit of $176 million since 2001. He says internal projections show additional losses of $92 million through 2013 with debt rising to $281 million.
Cuban controls 76% of the holding company that owns the Mavericks; he told the Morning News that he is the largest holder of the company’s debt, and that he has personally guaranteed the rest. “So he is suing me saying I can’t pay myself back,” Cuban said. Cuban acquired his fortune with the 1999 sale of Broadcast.com to Yahoo for $5.7 billion.