Former CIB Chiefs Try To Avoid Entanglement In Legal Light Involving Pacers

Former CIB Chiefs Try To Avoid Entanglement In Legal Light Involving Pacers

Anthony Schoettle for www.theindianalawyer.com

Three former presidents of the city’s Capital Improvement Board—Pat Early, Bob Grand and Ann Lathrop—are fighting an effort by attorneys for the IRS to depose them about what they learned about the Indiana Pacers’ finances during discussions with the team.

The CIB owns Bankers Life Fieldhouse, home of the NBA’s Pacers. And over the trio’s terms, the CIB has negotiated lease deals, subsidy plans and expenditures for capital projects for the venue, which opened in 1999.

The legal skirmish is an outgrowth of a lawsuit Mel Simon’s widow, Bren Simon, filed in March 2015 seeking to overturn the IRS’ determination that Mel’s sale of his half of the team to his brother Herb in early 2009—just months before Mel died at age 82—was such a sweetheart deal that Mel effecitvely provided an $83 million gift. That conclusion left Bren with a $21 million gift-tax bill, which she paid under protest but hopes to get refunded by winning the suit.

Attorneys with Bingham Greenebaum Doll LLP representing the CIB filed a motion in federal court in Indianapolis on Nov. 30 seeking to quash the deposition subpoenas. It calls them “overly burdensome” and says “allowing these depositions to go forward would harm the public interest by discouraging civic board membership and by unfairly imposing the costs of litigation between Bren Simon and the federal government on the citizens of Marion County, Indiana.”

Further, the three executives say in declarations filed with the court that they do not recall specific infomation about the value of the team during the period relevant to the Bren Simon lawsuit. They also assert that information they do have merely duplicates what the IRS has or is in the process of getting from the Pacers and Simons.

“The key issue in the underlying … litigation is whether Melvin Simon had donative intent—i.e. the intent to make a gift to Herb Simon—nearly seven years ago when the Simons reorganized the ownership structure of the Pacers,” the motion to quash says. “None of the CIB Former Board Members possess any information about Mr. Simon’s intent with respect to the reorganization.”

Bren’s attorneys contend that Mel received “full consideration” for his half of the team. They said in a court filing that “Herb and Mel were savvy and experienced businessmen, both skilled in making business deals and interested in striking the best deal for themselves.”

The IRS also has sparred with the Pacers over what information the team should provide and under what terms—a logjam that was recently broken. Under a protective order worked out last month, the Pacers agreed to provide a batch of information by Nov. 28 and another batch by Dec. 16.

Early, Grand and Lathrop are described in the motion to quash as holding “high-profile and demanding leadership positions” and also being active in civic affairs. Each says in declarations filed with the court that “attending a deposition in this matter would pose a substantial burden and hardship on me. My schedule is very rigorous.”

Early, president of the Somerset CPAs and Advisors accounting firm, was president of the CIB from 1994 to 1999 and was vice president from 2000 to 2009.

Grand, managing partner of the Barnes & Thornburg law firm, was CIB president from 2008 to 2010.

Lathrop, chief marketing officer and office managing partner for the Indianapolis office of the Crowe Horwarth LLP accounting firm, was CIB treasurer in 2008-2009 and president from 2010-2015.

The CIB—which also owns Lucas Oil Stadium, Victory Field and the Indiana Convention Center—is funded by a stew of local and regional taxes, many of

Three former presidents of the city’s Capital Improvement Board—Pat Early, Bob Grand and Ann Lathrop—are fighting an effort by attorneys for the IRS to depose them about what they learned about the Indiana Pacers’ finances during discussions with the team.

The CIB owns Bankers Life Fieldhouse, home of the NBA’s Pacers. And over the trio’s terms, the CIB has negotiated lease deals, subsidy plans and expenditures for capital projects for the venue, which opened in 1999.

The legal skirmish is an outgrowth of a lawsuit Mel Simon’s widow, Bren Simon, filed in March 2015 seeking to overturn the IRS’ determination that Mel’s sale of his half of the team to his brother Herb in early 2009—just months before Mel died at age 82—was such a sweetheart deal that Mel effecitvely provided an $83 million gift. That conclusion left Bren with a $21 million gift-tax bill, which she paid under protest but hopes to get refunded by winning the suit.

Attorneys with Bingham Greenebaum Doll LLP representing the CIB filed a motion in federal court in Indianapolis on Nov. 30 seeking to quash the deposition subpoenas. It calls them “overly burdensome” and says “allowing these depositions to go forward would harm the public interest by discouraging civic board membership and by unfairly imposing the costs of litigation between Bren Simon and the federal government on the citizens of Marion County, Indiana.”

Further, the three executives say in declarations filed with the court that they do not recall specific infomation about the value of the team during the period relevant to the Bren Simon lawsuit. They also assert that information they do have merely duplicates what the IRS has or is in the process of getting from the Pacers and Simons.

“The key issue in the underlying … litigation is whether Melvin Simon had donative intent—i.e. the intent to make a gift to Herb Simon—nearly seven years ago when the Simons reorganized the ownership structure of the Pacers,” the motion to quash says. “None of the CIB Former Board Members possess any information about Mr. Simon’s intent with respect to the reorganization.”

Bren’s attorneys contend that Mel received “full consideration” for his half of the team. They said in a court filing that “Herb and Mel were savvy and experienced businessmen, both skilled in making business deals and interested in striking the best deal for themselves.”

The IRS also has sparred with the Pacers over what information the team should provide and under what terms—a logjam that was recently broken. Under a protective order worked out last month, the Pacers agreed to provide a batch of information by Nov. 28 and another batch by Dec. 16.

Early, Grand and Lathrop are described in the motion to quash as holding “high-profile and demanding leadership positions” and also being active in civic affairs. Each says in declarations filed with the court that “attending a deposition in this matter would pose a substantial burden and hardship on me. My schedule is very rigorous.”

Early, president of the Somerset CPAs and Advisors accounting firm, was president of the CIB from 1994 to 1999 and was vice president from 2000 to 2009.

Grand, managing partner of the Barnes & Thornburg law firm, was CIB president from 2008 to 2010.

Lathrop, chief marketing officer and office managing partner for the Indianapolis office of the Crowe Horwarth LLP accounting firm, was CIB treasurer in 2008-2009 and president from 2010-2015.

The CIB—which also owns Lucas Oil Stadium, Victory Field and the Indiana Convention Center—is funded by a stew of local and regional taxes, many of for www.theindianalawyer.com

Three former presidents of the city’s Capital Improvement Board—Pat Early, Bob Grand and Ann Lathrop—are fighting an effort by attorneys for the IRS to depose them about what they learned about the Indiana Pacers’ finances during discussions with the team.

The CIB owns Bankers Life Fieldhouse, home of the NBA’s Pacers. And over the trio’s terms, the CIB has negotiated lease deals, subsidy plans and expenditures for capital projects for the venue, which opened in 1999.

The legal skirmish is an outgrowth of a lawsuit Mel Simon’s widow, Bren Simon, filed in March 2015 seeking to overturn the IRS’ determination that Mel’s sale of his half of the team to his brother Herb in early 2009—just months before Mel died at age 82—was such a sweetheart deal that Mel effecitvely provided an $83 million gift. That conclusion left Bren with a $21 million gift-tax bill, which she paid under protest but hopes to get refunded by winning the suit.

Attorneys with Bingham Greenebaum Doll LLP representing the CIB filed a motion in federal court in Indianapolis on Nov. 30 seeking to quash the deposition subpoenas. It calls them “overly burdensome” and says “allowing these depositions to go forward would harm the public interest by discouraging civic board membership and by unfairly imposing the costs of litigation between Bren Simon and the federal government on the citizens of Marion County, Indiana.”

Further, the three executives say in declarations filed with the court that they do not recall specific infomation about the value of the team during the period relevant to the Bren Simon lawsuit. They also assert that information they do have merely duplicates what the IRS has or is in the process of getting from the Pacers and Simons.

“The key issue in the underlying … litigation is whether Melvin Simon had donative intent—i.e. the intent to make a gift to Herb Simon—nearly seven years ago when the Simons reorganized the ownership structure of the Pacers,” the motion to quash says. “None of the CIB Former Board Members possess any information about Mr. Simon’s intent with respect to the reorganization.”

Bren’s attorneys contend that Mel received “full consideration” for his half of the team. They said in a court filing that “Herb and Mel were savvy and experienced businessmen, both skilled in making business deals and interested in striking the best deal for themselves.”

The IRS also has sparred with the Pacers over what information the team should provide and under what terms—a logjam that was recently broken. Under a protective order worked out last month, the Pacers agreed to provide a batch of information by Nov. 28 and another batch by Dec. 16.

Early, Grand and Lathrop are described in the motion to quash as holding “high-profile and demanding leadership positions” and also being active in civic affairs. Each says in declarations filed with the court that “attending a deposition in this matter would pose a substantial burden and hardship on me. My schedule is very rigorous.”

Early, president of the Somerset CPAs and Advisors accounting firm, was president of the CIB from 1994 to 1999 and was vice president from 2000 to 2009.

Grand, managing partner of the Barnes & Thornburg law firm, was CIB president from 2008 to 2010.

Lathrop, chief marketing officer and office managing partner for the Indianapolis office of the Crowe Horwarth LLP accounting firm, was CIB treasurer in 2008-2009 and president from 2010-2015.

The CIB—which also owns Lucas Oil Stadium, Victory Field and the Indiana Convention Center—is funded by a stew of local and regional taxes, many of