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Broncos file suit against Kaiser estate to confirm termination of first refusal rights

This is second time Kaiser's right of first refusal agreement with Pat Bowlen in 1984 has been in dispute. Courts ruled in Bowlen's favor in 1999.
Credit: AP
Denver Broncos owner Pat Bowlen looks on during an NFL football game between the Denver Broncos and the Houston Texans Sunday, Sept. 23, 2012, in Denver. (AP Photo/Jack Dempsey)

Representatives of PDB sports and Bowlen Sports Inc., the parent companies of the Denver Broncos, filed suit Monday evening in Denver Country District Court against companies and persons representing the estate of former owner Edgar Kaiser.

The Broncos companies are seeking to confirm unenforceability of Kaiser’s right of first refusal agreement with Pat Bowlen when the two engaged in a sale of the Denver Broncos in 1984. The purpose of the legal maneuvering from the Broncos end is to hopefully help smooth the transition from the Pat Bowlen Trust to an eventual owner, whether that be through a sale or transfer to a member of the Bowlen family.

Lawyers for PDB Sports and Bowlen Sports were contacted in May 2020 by ROFR (Right of First Refusal) Holdings, a Vancouver corporation started by Kaiser in 2005. ROFR Holdings told the Broncos it believed it had the right to match the terms of an offer in the event the team was going to be sold.

The lawsuit filed by PDB Sports and Bowlen Sports names as defendants ROFR Holdings; Twelve, LLC, Kaiser’s widow Susan Mullen Kaiser, who is also a director and officer of RFR Holdings and co-trustee of Kaiser’s estate; and two executor trustees of the Edgar F. Kaiser Jr. estate.

“This lawsuit is a proactive, necessary step to ensure an efficient transition of ownership whether the team remains in the Bowlen family or is sold,’’ said Dan Reilly, a lawyer who represents the Broncos’ companies and the trustees of the Pat D. Bowlen Trust. “We are confident that the court will find the right of first refusal is no longer enforceable, consistent with Colorado law and the intentions of Pat Bowlen and Edgar Kaiser in their written agreement more than 36 years ago.’’

This is not the first time the matter of Kaiser’s right of first refusal agreement with Bowlen has been in dispute. In 1999, Kaiser sued Bowlen in both federal and state courts claiming the right of first refusal had been triggered. In both cases, the courts ruled in Bowlen’s favor.

Kaiser died in 2012 and Bowlen lost his lengthy battle against Alzheimer’s in June 2019.

Meanwhile, the three trustees of the Pat D. Bowlen Trust – Joe Ellis, Rich Slivka and Mary Kelly – are defendants in a civil lawsuit brought against them by Pat Bowlen’s two oldest daughters, Amie Bowlen Klemmer and Beth Bowlen Wallace. The eldest daughters seek to have their father’s trust invalidated on the grounds he lacked mental capacity when it was last executed in 2009.

The trial, set for Arapahoe County Court Judge John E. Scipione, was first set to be heard Sept. 1, 2020, but has been rescheduled for July 12.

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