The complaint mentions that Gemini Holdings acquired majority ownership of Gemini Basketball LLC after acquiring the Sparks in 2006. To finance the deal the company took a $3.25 million loan from the Broadway Federal Bank, and took another $750,000 loan from the same bank in 2008.
Gemini sought to restructure its finances and avoid defaulting by modifying its debt in early 2011, and hired Samotny and his law firm upon the suggestion of Williams Holding Group, the current owner of Los Angeles Sparks.
Gemini claims that while renegotiating the loans the company was kept in the dark by the law firm that had “withheld significant material information.” The information allegedly not communicated to Gemini included the insistence of the bank that Williams Holding Group, the current owner of Sparks, act as guarantor for the loans. The complaint also states that the law firm knew that Williams had no intention to fund Sparks further, but kept this secret from Gemini, leading to default on the loans.
Gemini claims that it was kept out of the entire renegotiation with the bank by the law firm, and the complaint mentions, “Near the end of 2011, GBH began questioning Samotny and PFS as to what was happening and why they were not getting information. At that time, Samotny and PFS stated for the first time that they were not representing GBH at all, and were only representing the interests of WGH.”
Gemini alleges that the law firm’s malpractices led to Broadway Federal Bank suing Gemini and compelling it “into accepting a squeeze-out” of its interest in Los Angeles Sparks.