Colorado Probate Blog - Wade Ash Woods Hill & Farley, P.C.

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Denver Broncos Cleared for Future Sale?

Have an extra few billion lying around? You may soon be able to purchase the Denver Broncos...

 

Following a recent ruling, the courts have finally cleared the way for the sale of the Colorado football team.
The case, decided Tuesday, centered around a claim brought forth by Right of First Refusal (ROFR) Holdings that stated the business held the right of first refusal over the sale of the team. The claim stems from an agreement made between two former owners of the team, Edgar Kaiser and Pat Bowlen, both now deceased.
In 1984, as part of his deal to purchase the Broncos, Bowlen gave Kaiser the rights of first refusal, which would have allowed him to match any outside bid made on the sale of the team. Typically, when purchasing a multi-billion-dollar asset like the Broncos, interested parties will spend millions of dollars just to participate in the bidding process. Possible bidders, therefore, could be deterred by the idea that their successful, and expensive, auction bid could be matched, leading to a potentially drastic reduction in the sales price of the team.
Prior to his death, Kaiser placed his right of first refusal inside the holdings company. A stake of the company was then given to Arizona businessman Scott Schirmer.
Lawyers for the Broncos argue, however, that Kaiser’s right to first refusal was terminated at the time of his death and thus non-transferrable. ROFR Holdings, of course, contests this argument, contending that the contract between Bowlen and Kaiser allowed for the right to be transferred.
Ultimately, the courts sided with the Broncos, stating that the agreement made between Kaiser and Bowlen is no longer valid or enforceable.
Now, the future of the team will be left in the hands of Bowlen’s trustees, who will have the task of deciding whether one of Bowlen’s children will take over as the controlling owner or whether the franchise should be sold. As of now, an auction looks likely, and experts are predicting that the team could sell for a record-breaking sale price of $3.8 billion.
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