The legal battle between Phoenix Suns and Mercury owner Mat Ishbia and two of the franchise’s minority owners took another turn Monday, with the stakeholders accusing Ishbia of using the basketball organizations as his own “personal piggy bank” while hiding details of his spending from them.
Andy Kohlberg and Scott Seldin say Ishbia has mismanaged the pro basketball organizations, accusing him of financial malfeasance and of trying to use a capital call to try to bully them out of some of their shares in the franchises. Instead, they allege, it blew up in Ishbia’s face and afforded them an opportunity to take a majority share of the teams.
The accusations come in a legal filing made last week in Delaware court in response to a countersuit filed by Ishbia last month against the two minority owners, who had originally sued in August to begin what has become a messy legal drama.
“Ishbia does not own the Suns to make money for the company but he does operate it as a personal fiefdom for his own personal gain and for the benefit of his other businesses, including his mortgage company United Wholesale Mortgage,” the legal filing states. “The reality is that Ishbia is using the Suns as his personal piggy bank, including through a lengthy list of conflicted transactions — only some of which the Minority Owners are aware of.”
Ishbia, the two minority owners allege, made a loan to the Suns at an interest rate that is significantly above market rate. They say he leased the Mercury’s new practice facility to himself. They also claim that he has turned the Suns and Mercury into money-losing franchises while he intends to make money through UWM.
“This isn’t a lawsuit; it’s a shameless shakedown dressed up as legal process,” a spokesperson for Ishbia said. “From day one, Mat Ishbia was transparent that he was going to do things differently. Contrary to how the team was previously managed, Mat made it very clear he would invest significantly into the Suns and Mercury. He told all the investors that they could step up with him or sell their stake and step aside. Kohlberg and Seldin stayed in and now they’re trying to freeload off the value Mat created.
“Kohlberg and Seldin want to drag the organization backward, and they openly admit in this filing that investing in the team and its fans ‘makes no business sense.’ They are advocating neglect. They are free to sell their shares in the open market and if they don’t, they should be prepared to lose this lawsuit and participate in Mat’s continued investments in the teams and community.”
The disagreement stems from a capital call this past summer. Kohlberg said he originally went to Ishbia last September looking for the majority owner to buy out his share because of his own liquidity issues. Ishbia bought more than half of the teams in early 2023 at a $4 billion valuation and has since then bought out other minority shareholders. Kohlberg, through the legal filing, said Ishbia did not respond initially. When he went to him again and asked that he answer his offer by June 1, 2025, Ishbia, the filing said, set a capital call for the next day.
That capital call, the two minority owners claim, was used as a way to dilute their shares in the teams, which could occur if they did not pay, and to create a new lower per-unit share price. They ended up contributing their share, but when another member did not, Ishbia set another capital call for the next month, according to the filing, and they paid again.
They later learned that more of the capital had not been funded and that Ishbia had used a debt-to-equity conversion to fill the financial gap. This maneuver, Kohlberg and Seldin say, was not the legitimate way to do that. The two minority owners also say that a July 8, 2025, capital call was also not fully funded on time. They argue that under the team’s operating agreement, they would be afforded to buy the shares Ishbia had not funded himself. If they did, they would then have a majority stake in the franchises.
“Ishbia blundered into the very trap he set for the Minority Owners and faced a devastating dilution of his ownership interest if his failure was discovered,” the filing said. ”A failure that would wipe off his net worth and put his continued status as an NBA team owner and governor in jeopardy.”
Since assuming controlling interest of the Phoenix organizations in February 2023, Ishbia has promised championships. He started by spending. With the Suns, he made a big, early splash, trading for superstar Kevin Durant. Ishbia and the front office later doubled down and traded for Bradley Beal despite the star guard’s injury history and burdensome contract that included a no-trade clause. The moves backfired.
Last season, the Suns were perhaps the NBA’s biggest disappointment. Built around Durant, Beal and Devin Booker, they had the league’s most expensive roster, yet they finished 36-46 and failed to make the Play-In Tournament. Ishbia promised change.
Over the offseason, he overhauled the roster and front office. Phoenix traded Durant to the Houston Rockets and negotiated a buyout of Beal, a move that got the Suns out of the second apron, a payroll threshold that limits an organization’s ability to make roster moves, as well as the luxury tax.
Built around Booker, this season’s team lacks star power but has played well over the season’s first month. Entering Monday, the Suns (11-6) were one of the NBA’s early surprises under first-year coach Jordan Ott and had won eight of their past nine.
The Mercury have been more successful. In July of 2024, the WNBA franchise opened a $100 million, 58,000-square-foot practice facility in downtown Phoenix. Last season, the Mercury advanced to the WNBA Finals, where the Las Vegas Aces swept them in four games.
But the off-court issues continue.
Kohlberg and Seldin, who have invested in the Suns for more than two decades, first began their legal battle against Ishbia this summer, when they sued him for a lack of transparency and the team’s unwillingness to provide them with internal financial records. They alleged that Ishbia’s capital call in June appeared to be “part of a leverage strategy to exert pressure on and dilute” their ownership shares.
Ishbia countersued last month, claiming the minority owners were trying to force him to buy out their ownership stakes at an “extortionate” cost. He dismissed their claims as part of a public-relations ploy.
Kohlberg and Seldin are the only remaining minority owners who still invested in the Suns and Mercury, and originally bought in while Robert Sarver led the franchises. Ishbia bought the two teams in early 2023 and has since rolled up minority stakes; he now owns roughly 85 percent of the franchises.
Ishbia professed this fall that he will not settle any of the seven lawsuits he and the teams face. In addition to the mismanagement complaint, former and current employees have accused the organization of discrimination, harassment, wrongful termination and other issues. The Suns have denied these allegations.
“The truth is, you actually got to win a lawsuit,” Ishbia said in September. “And where I’m different than most successful people … is like, we don’t settle. If we don’t do anything wrong, I’m not paying someone. I hope you guys all report on how many lawsuits we actually lose.”
