Mark Walter has agreed to sell his controlling stake in the Los Angeles Lakers for a league record of $12.5 billion, just as federal authorities continue to probe businesses tied to the billionaire’s wealth.
Walter gained control of the Lakers last year, valuing the club at $10 billion and now appears poised for a major profit from selling the majority stake to former Disney chief executive Bob Iger and venture capitalist Joshua Kushner.
The deal will be significant in part given federal prosecutors and the SEC simultaneously look into two life insurers that Walter controls in Delaware. Last week, the insurers restated $21 billion in loans it had on the books after self-audits revealed what it described as related-party transactions.
The restated loans will likely come under scrutiny regarding corporate governance and financial accounting, though neither Walter nor his firms have been accused of any legal wrongdoing.
Walter’s holding company TWG Global is cooperating fully with investigators and expects the investigation to conclude “favorably”.
It is hoped that the additional capital from the sale of the Lakers will assist Walter in meeting some financial responsibilities tied to the insurers’ transactions, though at this stage it is not clear whether the sale will have further impacts on ongoing investigations.
Investigators continue to pore over loans; meanwhile, Delaware Life has implemented a remedial plan, and its ratings have been downgraded regarding outlook; nonetheless, it remains a financially solvent insurer.
Investigations could well take years and leave the larger question of Mark Walter’s entire business empire in uncertainty.
