LOS ANGELES - The NBA has called off a hearing to oust embattled Los Angeles Clippers co-owner Donald Sterling in advance of a vote on a potentially record-breaking deal negotiated by his wife Shelly Sterling to sell the team to former Microsoft CEO Steve Ballmer for $2 billion.
Shelly Sterling negotiated the deal despite objections expressed through her estranged husband Donald Sterling's attorneys. She said in a statement late Thursday that she agreed to sell the team to Ballmer "under her authority as the sole trustee of The Sterling Family Trust, which owns the Clippers."
The NBA said in a statement Friday that the league, Shelly Sterling and The Sterling Family Trust had "resolved their dispute over the ownership of the Los Angeles Clippers."
"Under the agreement, the Clippers will be sold to Steve Ballmer, pending approval by the NBA Board of Governors, and the NBA will withdraw its pending charge to terminate the Sterlings' ownership of the team," it said.
The ownership hearing had been scheduled for next Tuesday.
Donald Sterling was stripped of his ability to act as a trustee of the family's fortunes, including the Clippers, after two neurologists determined he was suffering from dementia earlier this month, according to a person close to the Sterling family.
The individual, who is familiar with the trust and the medical evaluations but wasn't authorized to speak publicly, said Sterling was deemed "mentally incapacitated" according to the trust's conditions because he showed "an inability to conduct business affairs in a reasonable and normal manner."
Donald Sterling made voluntary visits to two prominent neurologists who conducted extensive tests, including brain scans, earlier this month, the person said. Though Donald Sterling is no longer a co-trustee of The Sterling Family Trust, he still retains his 50 percent ownership and still receives proceeds from the sale, the individual said.
"There is specific language and there are protocols about what to do, and steps in order to get a sole trustee position and that's what took place in the last couple of days," the individual said.
Sterling can try to reinstate his trusteeship by appealing to the California Probate Court.
Donald Sterling's attorneys contend, however, that as a co-owner he must also give his consent for the deal to go through. They say he won't be giving it. His attorney, Bobby Samini, said "the assertion that Donald Sterling lacks mental capacity is absurd" and that he'll fight to not sell given the NBA's conduct.
The NBA's statement said that Shelly Sterling and The Sterling Family Trust also "agreed not to sue the NBA and to indemnify the NBA against lawsuits from others, including Donald Sterling."
Ballmer said in a statement that he is honored to have his name submitted to the NBA for approval and thanked the league for working collaboratively with him throughout the process.
Shelly Sterling negotiated the sale after Donald Sterling made racist remarks that were made public. The remarks included Sterling telling girlfriend V. Stiviano not to bring blacks to Clippers games, specifically mentioning Hall of Famer Magic Johnson.
Franchise sale prices have soared since the current collective bargaining agreement was ratified in 2011. The Milwaukee Bucks were just sold to New York investment firm executives Marc Lasry and Wesley Edens for about $550 million, an NBA record.
Last year, Vivek Ranadive's group acquired a 65 percent controlling interest in the Sacramento Kings at a total franchise valuation of more than $534 million.
This is not Ballmer's first foray into potential NBA ownership. Ballmer and investor Chris Hansen headed a group that agreed to a deal to buy the Kings from the Maloof family in January 2013 with the intention of moving the team to Seattle, where the SuperSonics played until 2008.
But Sacramento Mayor Kevin Johnson lobbied the NBA for time to put together a bid to keep the team in California, and though the Ballmer-Hansen group later increased its offer, owners voted to deny the bid for relocation and the Kings were sold to Ranadive.
The former Microsoft CEO helped Bill Gates transform the company from a startup with fewer than 40 employees and $12 million in annual revenue into the world's most valuable business. The pair met in 1973 while living down the hall from each other in a Harvard dorm.
During his tenure at Microsoft, Ballmer was known for his competitive drive and wild displays of emotion and hand-waving.