John Tavares, Bruce Ratner, Charles Wang and Patrik Elias take the ceremonial faceoff before a preseason game at the Barclays Center on September 21, 2013 in Brooklyn, New York.
John Tavares, Bruce Ratner, Charles Wang and Patrik Elias take the ceremonial faceoff before a preseason game at the Barclays Center on September 21, 2013 in Brooklyn, New York. (Bruce Bennett/Getty)

Kaye Scholer is counseling the National Hockey League’s New York Islanders on its reported $548 million sale to an investor group advised by Katten Muchin Rosenman that will take full control of the franchise in two years.

The deal, the first sale of an NHL team since ex-Paul, Weiss, Rifkind, Wharton & Garrison corporate partner Douglas Cifu was part of an ownership group that paid $250 million for the Florida Panthers late last year, comes a week after Andrew Barroway, a former high-flying Philadelphia plaintiffs lawyer turned hedge fund executive, retained Blank Rome to sue the Islanders’ current ownership after it allegedly reneged on a handshake deal to sell him the team in May. That move followed the record-setting $2 billion sale of the National Basketball Association’s Los Angeles Clippers to former Microsoft CEO Steve Ballmer, a deal that closed this month after a probate court battle.

Under the terms of the deal announced late Tuesday, current Islanders owner Charles Wang has agreed to sell a minority stake in the team to former Washington Capitals co-owner Jonathan Ledecky in New York and London-based investor Scott Malkin. The duo, two former Harvard roommates with a history of building companies together, would acquire a majority interest in the Islanders within two years. Financial terms of the transaction were not disclosed, although various news reports put the purchase price at $548 million, a number cited in Barroway’s suit against Wang.

The sum represents a hefty premium on the $74.2 million that Wang paid for the Islanders as part of a $187.5 million sale of the team in 2000, in which he and former co-owner Sanjay Kumar assumed roughly $100 million in team debt. That deal came on the heels of a disastrous and ultimately aborted $165 million sale of the Islanders to convicted fraudster John Spano—the subject of an ESPN television documentary last year—although the ownership tenure of Wang and Kumar would not be without its own issues.

In 2004, Wang bought out Kumar’s stake in the team after a $400 million accounting scandal roiled Computer Associates International, the Islandia, N.Y.-based software company they cofounded that is now known as CA Technologies. Kumar pleaded guilty to fraud charges in 2006—he’s now serving a 12-year sentence and scheduled for release in January 2018—and subsequently criticized the conduct of Wang and some of CA’s outside lawyers. (An internal report compiled by Fried, Frank, Harris, Shriver & Jacobson found that Wang was complicit in the fraud, but he has never been charged.)

Wang said publicly in 2009 that he regretted buying the Islanders, which has lost money for years and has long played in one of North America’s worst sporting arenas in Nassau County on Long Island. In 2012 the team announced that it would leave Long Island after the expiration of its lease following the 2014-15 season and begin playing its games at Brooklyn’s brand-new Barclays Center, a move that appears to have helped make the team more attractive to potential buyers. Forbes valued the Islanders at $195 million in November 2013.

Earlier this year, Wang zeroed in on a buyer for the team in Barroway, a former name partner at Radnor, Pa.-based Schiffrin, Barroway, Topaz & Kessler who founded Merion Investment Management in the affluent Philadelphia suburb of Radnor back in 2009. Barroway had been one of the lead bidders vying for the NHL’s New Jersey Devils, which was sold by former Lehman Brothers executive Jeff Vanderbeek for $320 million a year ago this month. (Boies, Schiller & Flexner’s Richard Birns—who left the firm last month for Gibson, Dunn & Crutcher—advised Vanderbeek on the sale to Joshua Harris, a private equity executive advised by Wachtell, Lipton, Rosen & Katz who already owns the NBA’s Philadelphia 76ers.)

Schiffrin Barroway, now known as Kessler Topaz Meltzer & Check, was known for scoring some of the highest class action awards in history, such as a $2.9 billion securities settlement with Tyco International in 2007 that generated $464 million in attorney fees. Richard Schiffrin retired from Schiffrin Barroway in 2008 and subsequently joined Grant & Eisenhofer as of counsel. Barroway, a former managing partner of Schiffrin Barroway, transitioned to senior counsel at the firm before coming down from its shingle in 2011.

According to the civil complaint filed by Barroway against Wang last week, the latter agreed in March to sell the Islanders for $420 million to Barroway’s group or pay a $10 million breakup fee. The deal, which included $100 million in cash, collapsed a few months later when Wang allegedly sought $548 million for the team following Ballmer’s whopping purchase of the Clippers. The complaint states that Wang informed Barroway on Aug. 1 that he had chosen to sell the Islanders to another unnamed investment group.

Blank Rome corporate litigation chair Harris Cogan in New York, who is leading a team from the firm representing Barroway in the suit, declined to comment on Wang’s proposed deal with Ledecky and Malkin when contacted by The Am Law Daily. Other Blank Rome lawyers representing Barroway include litigation cochair Grant Palmer, litigation partner Simon Miller (who joined the firm earlier this year from Thompson Hine) and M&A cochair Gary Goldenberg, the latter of whom took the lead on the proposed sale, according to an Islanders sale agreement attached to Barroway’s complaint, which seeks $10 million in damages from Wang.

Kaye Scholer is also representing Wang in the litigation—the NHL has said it will not intervene in the dispute—filed on Aug. 11 in state court in Manhattan. Corporate partner Mark Kingsley, corporate cochair Emanuel Cherney, tax chair Laurie Abramowitz and associate Konstantinos “Dino” Yiannopoulos are leading the Kaye Scholer team advising Wang on the Islanders’ sale to Ledecky and Malkin. Islanders alternate governor Roy Reichbach and deputy general counsel Stacey Sabo, both of whom work as in-house attorneys at Wang-owned video streaming company NeuLion, are also advising on the matter.

Adam Klein, head of the Chicago corporate group and national sports practice at Katten Muchin, did not immediately respond to a request for information on the names of the lawyers from the firm representing Ledecky and Malkin, nor did two firm spokeswomen. Klein himself is a veteran sports dealmaker, having had roles on the sales of the NBA’s Detroit Pistons, Golden State Warriors and Sacramento Kings.

As for Ledecky, he sold his 24 percent stake in the Washington Capitals back in 2001. Ledecky is the brother of David Ledecky, a former Kirkland & Ellis litigation of counsel and father of U.S. Olympic gold medal-winning swimmer Katie Ledecky. David Ledecky serves on the board of his brother’s personal foundation and as chief compliance officer for Jackson, Wy.-based Connector Capital Corp., an investment vehicle controlled by Jon Ledecky that invests in e-commerce and mobile technology companies.

Securities filings show that Blank Rome has handled some corporate work involving Connector Capital, as have Reed Smith and Venable.