DALLAS -- Dallas Mavericks owner Mark Cuban is accused of wrongfully diverting millions of dollars from the NBA franchise's home arena to help make up for cash shortfalls incurred by the team, according to a lawsuit filed by a company controlled by the team's former owner.

The lawsuit claims Cuban covered the Mavericks' financial shortfalls by obtaining more than US$29 million in unauthorized loans through a limited partnership designed to distribute profits from the arena, the American Airlines Center. It accuses the Mavericks and three other companies controlled by Cuban of breach of contract, breach of fiduciary duty and unjust enrichment.

The company that filed the suit, Hillwood Center Partners, is controlled by former Mavericks owner Ross Perot Jr. and holds a small interest in the arena's limited partnership, Radical Arena. A related Perot company sold the Mavericks to Cuban in 2000.

The lawsuit was filed Wednesday in state district court in Dallas, and a copy was obtained Monday by The Associated Press.

In an email to media, Cuban said his lawyers have been open with Perot about the loans. He said the proceeds have been used "to put the best possible Mavericks team on the court," creating sellouts for the arena and driving customers to nearby businesses.

Cuban said he believes Perot is "trying to find nickels in the sofa cushion" in an attempt to recapture losses stemming from the Victory project, the retail and office development surrounding the arena. Perot's development company gave up its stake in the project to German investors in April, resulting in a reported loss of $100 million.

"I have to tell you that the biggest mistake I made in buying the Mavs was in not completely buying out (Perot's) interest," Cuban wrote.

Hillwood spokesman Eddie Reeves said the company tried unsuccessfully to resolve its issue with Cuban before filing the lawsuit.

"At this point, we feel this is the only option we are left," he said.

The suit claims Cuban, acting as Radical Arena's general partner, caused the partnership to make multiple loans to the Mavericks instead of distributing the funds within the corporation. The first loan was made in September 2006 and provided the Mavericks with $20 million at an interest rate of 5.4 per cent, according to the lawsuit.

The transaction allowed the Mavericks to enjoy terms "substantially more favourable" than those the team would have obtained from an independent or unrelated lender, according to the suit. By not guaranteeing repayment of the note, Cuban avoided personal liability and obtained a substantial benefit for himself, the lawsuit alleges.

Cuban has twice extended the maturity dates of the loan and borrowed an additional $8.1 million, it said. At the same time, the loan's interest rate was reduced to 3.5 per cent, according to the suit.

Radical Arena owns approximately 33.5 per cent of Center Operating Co., which operates the American Airlines Center under a long-term lease with the city of Dallas, according to the lawsuit. Center Operating Co. collects rent from the facility's two main occupants, the Mavericks and the NHL Dallas Stars.

Hillwood's lawsuit also claims that Cuban has borrowed another $15 million for the Mavericks from other arena-related entities.

The Dallas law firm that filed the lawsuit on behalf of Hillwood is the same one that has represented former Mavericks coach Don Nelson in his ongoing battle with Cuban to obtain more than $7 million in deferred compensation. Representatives of the firm, Figari & Davenport, declined comment.

On Friday, a federal judge dismissed an insider trading lawsuit filed by the Securities and Exchange Commission against Cuban because the agency didn't allege that he had agreed not to trade based on confidential information he received about an Internet search engine company.

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Just to add more info from the previous post:
DALLAS -- The feud between Dallas Mavericks owner Mark Cuban and former coach Don Nelson stretches back nearly seven years and has some US$7 million at stake. But just how ugly and dysfunctional their relationship has been is only now being revealed.

Previously secret testimony and email, now in the public record as part of legal proceedings initiated in the last 10 months, paint the picture of a spat that has turned two of the NBA's best-known figures into bitter adversaries.

There's deposition testimony from Cuban in which he acknowledges that he withheld consulting fees from Nelson in 2006 because he believed the former coach had "badmouthed" the team during the NBA finals and should be made to "beg" for the money.

There's also testimony from Nelson in which he describes being so disgusted with Cuban that he signed a contract to stay on as coach in 2003 only after friends "got me drunk."

"I think everybody would like to see this settled amicably, but you know how it is in a lawsuit," said former Mavericks assistant Del Harris, who frequently acted as an intermediary between Cuban and Nelson when he worked for the team.

The proceedings stem from a contract dispute over whether Nelson, now the coach of the Golden State Warriors, should be paid millions in salary he deferred while coaching the Mavericks from 1997 to 2005.

Nelson contends that he legitimately earned the money.

Cuban believes Nelson should get nothing because he breached a contract that made him a Mavericks consultant when he took the Golden State job in August 2006. Although an arbitrator ruled in Nelson's favour, Cuban has refused to pay the money, now totalling more than $7 million.

Neither Cuban nor Nelson would comment when contacted by The Associated Press for this story.

The matter is one of several legal actions currently involving Cuban, the dot.com billionaire who has become famous for his outspoken ways, courtside antics and outbursts against NBA officials.

A federal judge last week dismissed an insider trading suit brought against Cuban by the Securities and Exchange Commission, though the agency can still amend its complaint.

Another lawsuit filed last week by a company controlled by former Mavericks owner Ross Perot Jr. accuses Cuban of wrongfully diverting millions in profits derived from the Mavericks' home arena, the American Airlines Centre, to cover cash shortfalls incurred by the team.

Cuban's refusal to abide by the arbitrator's decision led Nelson to file suit in state court last September. The court upheld the decision, but Cuban is appealing.

Nelson has also filed a defamation suit against Cuban in California over comments the owner made on a Bay Area radio show in 2007. He claims that Cuban, who was on the show to promote his appearance on "Dancing with the Stars," defamed him when he said the coach's demand for money was an attempt "to rip me off."

In support of his claim, Nelson has included in his court filings an off-the-record email exchange between Cuban and a reporter in which Cuban refers to Nelson as "sleazy" and having "no concept of reality or ethics."

The judge in the case last month granted a motion by Cuban and tossed the suit, in part because Nelson is a public figure.

Perhaps the most revealing document in the public record is the transcript of the arbitration hearing, which took place in June 2008.

During the hearing, Cuban and Nelson gave their versions of how their relationship unravelled, beginning with their disagreement over whether star forward Dirk Nowitzki should play against the San Antonio Spurs in the sixth game of the 2003 Western Conference finals.

Nelson withheld Nowitzki, who had suffered a knee injury earlier in the series, despite Cuban's entreaties to play him. The Mavericks lost the game and the series.

Cuban testified that he had assurances from team doctors that Nowitzki couldn't hurt the knee any worse and believed Nelson was trying to take pressure off himself by keeping the player on the bench.

Nelson testified that he had a similar injury when he was a player and worried that playing Nowitzki could have a long-term effect.

"I didn't want to jeopardize this great young player's career for a basketball game, no matter how important it seemed at the time," Nelson testified.

Cuban said in his testimony that there had been medical advances for such injuries since Nelson played, which was from 1962-76.

From that point on, Nelson testified, he was phased out of personnel decisions. At the 2004 draft, he thought he was in charge of the Mavericks' selections until he spoke with his son, Donnie, the team's president of basketball operations, during a men's room conversation that night.

Cuban, in his testimony, denied keeping Nelson out of the loop, saying personnel matters were group decisions.

The hearing testimony also brought out how Cuban and Nelson remained at odds even after Nelson turned over the coaching job to Avery Johnson late in the 2004-2005 season.

Cuban testified that he learned from Johnson that Nelson had been "badmouthing" him while standing in a tunnel leading to the court during home games.

Cuban testified that he then invented a "****amamie" story during the 2006 NBA finals that NBA safety regulations prevented anyone from standing in arena tunnels during those games.

Nelson denied saying anything negative about Johnson and said Cuban wanted him moved out of the tunnel "because I was getting my face on television instead of Mark."

Nelson also described how he hoped to serve as a mentor behind the scenes in the mold of Red Auerbach, his former coach with the Boston Celtics, yet wasn't given the chance by Cuban.

"I actually thought when we split we would become friends again," he said. "That's how naive I was."

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