NEW YORK, Sept 14 (Reuters) - King & Spalding has settled a $195 million malpractice lawsuit brought by The Atlanta Spirit Group, owner of the Atlanta Hawks basketball team, the Atlanta Thrashers hockey team, and the holder of operating rights to Philips Arena.
The terms of the settlement were not made public.
Atlanta Spirit had hired King & Spalding in 2005 to draft a contract to buy out a co-owner of the sports teams and arena rights, SB Belkin LLC.
Later that year, the group and SB Belkin clashed over who the contract allowed to select the appraiser of the value of SB Belkin's interests. SB Belkin sued Atlanta Spirit in Maryland, claiming the business group had breached the contract. Atlanta Spirit hired King & Spalding to defend it in that suit.When a Maryland court granted summary judgment in Belkin's favor, King & Spalding withdrew; the group and SB Belkin finally settled that dispute in December 2010, the malpractice suit said.
The next month, Atlanta Spirit filed the malpractice suit in Georgia state court, blaming the firm for drafting a contract that was flawed.
In that lawsuit, Atlanta Spirit claimed, among other things, that the contract failed to give Atlanta Spirit the right to choose a group to appraise the value of Belkin's share. That botched contract, the group alleged, cost $14.5 million in defending the Belkin litigation, a loss of franchise value of $50 million and more than $130 million lost in operating the Thrashers because that franchise would have been sold, if not for the "cloud on the franchise's title."
Attorneys for both parties said their clients were pleased to have resolved the suit amicably. Steve Collins, a partner at Alston & Bird who represented King & Spalding, declined to say whether or not the settlement amount was within the limits of King & Spalding's malpractice insurance.
The case is HTPA Holding Company, LLC et al v. King & Spalding, Superior Court of Fulton County, No. 11-195487
For Atlanta Spirit Group: Robert Shields, Everette Doffermyre and Samuel Wethern of Doffermyre Shields Canfield & Knowles.
For King & Spalding: Steven Collins of Alston & Bird.
(Reporting by Erin Geiger Smith)
(An earlier verision of this story identified the Atlanta Thrashers as a basketball team. They are a hockey team.)