The Donald Sterling case: A glimpse at the dirty laundry

It’s not uncommon for a business leader’s personal and professional lives to intersect, but seldom does that happen as spectacularly as it has with Donald Sterling.

The real estate magnate and Clippers owner’s relationship with V. Stiviano, a woman his wife, Rochelle, alleges to be a money-grubbing seductress, appears to be related to the tape on which Sterling is alleged to make a raft of racist remarks. The recording purportedly is a conversation between Stiviano and Donald Sterling.

Rochelle Sterling sued Stiviano in Los Angeles County Superior Court last month, demanding that she relinquish $500,000 worth of luxury cars, a $1.8-million duplex, and other gifts Donald Sterling supposedly gave her without Rochelle’s knowledge or consent. The legal issue in the case, as Rochelle Sterling contends, is whether her husband had the right to provide Stiviano with any of the couple’s “community property” -- i.e., their money -- without her permission. Sterling was recently estimated by Forbes to be worth $1.9 billion, so whatever he gave Stiviano, there’s plenty left over.

Stiviano returned fire in a court document dated April 21. Since her relationship with Sterling, which reportedly began at the 2010 Super Bowl, has now become a public issue, it’s proper to examine how she describes Sterling and that relationship in the document filed by her attorney, Mac Nehoray of Calabasas. The National Basketball Assn. is examining whether Sterling’s alleged remarks warrant league discipline, and the Sterling-Stiviano case could conceivably result in Sterling giving up ownership of the Clippers.

It’s worth noting that this isn’t the first time -- and surely won’t be the last -- that ownership of a business enterprise has been thrown in doubt by allegations about the personal behavior of the owner. Something similar happened with the Dodgers during the Frank and Jamie McCourt divorce, which turned in part on how the couple structured their ownership of the team. Pixar ended up as an independent company (eventually purchased by Steve Jobs), in part as a consequence of the divorce case of George Lucas, its founder, and his wife Marcia.

In general, Stiviano maintains that Sterling made the gifts of his own free will, that she didn’t have a business or fiduciary relationship with him that controlled their financial relationship, that she engaged in nothing like “fraud” or “other wrongful acts,” and therefore that Rochelle Sterling has no grounds to demand return of the of the assets.

Further, Stiviano maintains that Rochelle Sterling knew about their relationship and even hints that they appeared at the same charity events.

As befits what some might consider the squalor of the Sterling-Stiviano relationship, the language of Stiviano’s legal filing doesn’t much resemble what you’d find in the average business lawsuit. But it does demonstrate the technique of using an adversary’s strength against him -- in this case, Sterling’s reputation as a savvy businessman.

From the document:

“This is an action brought by a very angry wife whose husband is a highly public figure and who is well known to be ‘keeping women’ other than his wife and who has done so for very many years with a big toothy grin brandishing his sexual prowess in the faces of the Paparazzi and caring less what anyone else thought, the least of which, his own wife....

“The ‘relationship’ ... between Mr. Donald T. Sterling and Ms. V Stiviano was open, notorious, obvious and long standing. Ms. Stiviano attended hundreds of events, participated in myriad charity functions sponsored by Mr. Sterling, and was a veritable ‘fixture’ at his business offices over the last four (4) years. Mrs. Sterling was very frequently accompanying Mr. Sterling at events wherein she and V Stiviano were integrally involved in the charitable functions themselves....

“Mrs. Sterling is not even hinting that her billionaire philandering husband had performed any clandestine acts behind her, as it is alleged that Mr. Sterling was making gifts to V Stiviano since 2010.... [Emphasis in original.] Mrs. Sterling pleads her absolute knowledge of a long standing history of similar acts of Mr. Sterling who is infamous for his gold plated dalliances....

“Nowhere in the complaint is it alleged ... that the feminine wiles of Ms. Stiviano overpowered the iron will of Donald T. Sterling who is well known as one of the most shrewd businessmen in the world.”

It’s only fair to point out that at least once in the past Sterling admitted to a sexual relationship with a woman who ended up with valuable real estate, supposedly as a gift. In 2003, he gave a deposition in a lawsuit involving one Alexandra Castro, in which he described their relationship in terms not safe for work -- in fact, not safe for reading by anyone other than an adult. (Portions of the document were published by the Smoking Gun website.) Sterling and Castro settled their dispute over her $1-million Beverly Hills residence out of court.