Affirmed and Opinion Filed August 21, 2014 

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In The 

## Court of Appeals Fifth District of Texas at Dallas No. 05-11-01470-CV HILLWOOD INVESTMENT PROPER TIES III, LTD, Appellant V. RADICAL MAVERICKS MANAGEMENT , LLC, AND DALLAS BASKETBALL LIMITED D/B/A DALLAS MAVERICKS, Appellees

On Appeal from the 192nd Judicial District Court Dallas County, Texas Trial Court Cause No. 10-05639 

### MEMORANDUM OPINION Before Justices Moseley, Bridges, and Lang-Miers Opinion by Justice Bridges Hillwood Investment Properties III, Ltd. appeal s the trial court’s su mmary judgment in favor of Radical Mavericks Management, LLC, and Dallas Basketball Limited d/b/a Dallas Mavericks. In two issues, Hillwood argues the trial court erred in granting summary judgment on its claim that a receiver should have been ap pointed and abused its di scretion in entering an order sealing certain docu ments. We affirm the trial court’s judgment. In May 2010, Hillwood filed its original petiti on against the Mavericks asserting, among other things, the Mavericks were insolvent and/ or in imminent danger of insolvency. Hillwood asserted it was entitled to the appointment of a receiver to take charge of the management and control of the Mavericks. As a factual basis for this assertion, Hillwood stated it was the former majority interest owner of the Ma vericks, and it conveyed this majo rity interest to entities owned–2– and controlled by Mark Cuban in April 2000. Since the Cuban-related entities acquired control of the Mavericks, Hillwood alleged, the Mavericks maintained one of the highest payrolls in the NBA and incurred substantial operating losses and interest-bearing debt. Hillwood alleged these conditions rendered the Mavericks “insolvent on a book basis.” Hillwood, as a co-owner of the Mavericks, alleged the busines s decisions made under the dir ection of Cuban substantially diminished the value of Hillwood’s investment in the Mavericks. By the time Hillwood filed its second amended original petition, Hillwood a sserted only causes of action seeking the appointment of a receiver and an in dependent forensic accountant. In October 2011, the Mavericks filed an “amended motion for summary judgment” in which they argued there was no evidence of insolvency and no necessity for a receiver. The motion asserted: “Hillwood cannot establish that the Dallas Ma vericks are insolvent or in imminent danger of insolvency – it is undisputed th at the Dallas Mavericks have paid all debts as they come due and there is sufficient cash availabl e to do so for several y ears. Moreover, Cuban is an integral part of the ongoing NBA labor nego tiations. If a receiver is appointed over the Dallas Mavericks, the company and its owners could suffer substantial harm by losing Cuban’s insight and influence in the ne gotiations.” The motion argued that the undisputed evidence establishes that the Mavericks have paid their de bts as they become due in the usual course of business. Two days after filing the motion for summary judgment, the Mavericks filed a motion to seal records. Specifically, th e Mavericks requested that the trial court seal some of the information Hillwood designated and intended to submit in response to the motion for summary judgment, including certain depositions and exhi bits containing financia l information about the Mavericks and information about negotiations of a new NBA collective bargaining agreement. Subsequently, the Mavericks filed an additiona l affidavit of Richard W. Buchanan, Executive–3– Vice President and General Counsel of the NBA, who stated two of the exhibits the Mavericks sought to have sealed contai ned “highly confidential and competitively sensitive business information of the NBA and its member teams, the public disclosure of which would adversely impact the business operations of the NBA and its member teams.” One of the exhibits, “Exhibit 21,” consisted of internal NB A financial reports of the Ma vericks and summary financial information about the other twen ty-nine NBA member teams. E xhibit 21 was the product of the full-time work of approximately three to four employees of the NBA finance department over the course of a six-to-seven-month period each year . Within the NBA, access to the document is limited to senior NBA executives within the Commissioner’s Office and the NBA’s Finance and Legal Departments, and to a small group of NBA senior execu tives and consultants. The information contained in Exhibit 21 was provided to the NBA Play ers’ Association in connection with ongoing collective bargaining negotiations, “but only after entry of a confidentiality agreement to ensure against the public disclosure of the informa tion contained therein.” Exhibit 21 is kept confidential by the NBA for the same reason that sensitive financial information is typically kept confidential – because its disc losure would put the NBA and its teams (and the Mavericks in particular) at a competitive disadv antage. As to the other document, Exhibit 33, Buchanan stated it contained internal NBA financ ial reports concerning ticket sales and was only accessible to a limited number of individuals with in the NBA. Exhibit 33 was also provided in connection with ongoing collective bargaining ne gotiations after “entry” of a confidentiality agreement. Hillwood filed a response to the Mavericks’ motion for summary judgment supported by the affidavit of John D. Finnert y, a professor of finance at Fo rdham University’s Graduate School of Business Administration. Finnerty stated the “inability to pay debts as they come due test for insolvency is a forward-looking test, in which the financial analyst evaluates an entity’s–4– ability to meet all of its obligat ions as they mature.” The test , Finnerty stated, “is not whether the entity has paid its debts in the past.” Finner ty testified that the Mave ricks are “insolvent on a stand-alone basis” because they are unable to pay debts as they come due without a commitment from a credit worthy third-party. On October 25, 2011, the trial court granted the Mavericks’ motion to seal certain specified documents, including Exhibit 21 and E xhibit 33. On November 3, 2011, the trial court granted the Mavericks’ motion for summ ary judgment. This appeal followed. In its first issue, Hillwood ar gues the trial court erred in granting the Mavericks’ motion for summary judgment. Specifically, Hillwood argues Finnerty’s testimony raised a fact issue as to whether the Mavericks are insolvent. One ground in the motion for summary ju dgment was there was no evidence of insolvency. A party may move for summary j udgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. See T EX . R. C IV . P. 166a(i). To avoid a no-evidence summary judgment, the non-moving party must bring forth mo re than a scintilla of probative evidence to raise a genuine issue of material fact as to the element or elements attacked. King Ranch, Inc. v. Chapman , 118 S.W.3d 742, 751 (Tex. 2003). More than a scintilla of evidence exists when the evidence rises to a level that would enable reas onable and fair-minded people to differ in their conclusions. Id. On the other hand, the evidence amounts to no more than a scintilla if it is so weak as to do no more than create a mere surmise or suspicion of a fact. Id. We review de novo a summary judgment granted on either no-evidence or traditional grounds, examining the entire reco rd in the light most favorable to the non-mova nt, indulging every reasonable inference and resolving any doubts against the motion. Sudan v. Sudan , 199 S.W.3d 291, 292 (Tex. 2006) (per curiam). If th e trial court’s order doe s not specify the grounds–5– on which it granted summary judgment, we affirm if any of the grounds sp ecified in the motion are meritorious. See Provident Life & Acc. Ins. Co. v. Knott , 128 S.W.3d 211, 216 (Tex. 2003). We affirm a no-evidence summary judgment if, as to an essential element of the claim or defense identified in the motion: (a) there is a complete absence of evidence; (b) the court is barred by rules of law or of evidence from givi ng weight to the only evidence offered; (c) the evidence offered is no more than a mere scintilla; or (d) the evidence conclusively establishes the opposite. See King Ranch , 118 S.W.3d at 751. A court that has jurisdiction over the property and busine ss of a domestic entity may appoint a receiver for the entity if it is established that the entity is insolvent or in imminent danger of insolvency. T EX . B US
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. C ODE A NN . § 11.404(a)(1)(A) (West 2012). “Insolvent” means a person who is unable to pay the person’s debts as they become due in the usual course of business or affairs. Id. § 1.002(40). “Insolvency” means the inability of a person to pay the person’s debts as they become due in the usual course of business or affairs. Id. § 1.002(39). Receivership is an extraordinarily harsh re medy and one that courts are particularly loathe to utilize. Indep. Am. Sav. Ass’n v. Preston 117 Joint Venture , 753 S.W.2d 749, 750 (Tex. App.–Dallas 1988, no writ). The burden of proof to show the existence of circumstances justifying the appointment of a receiver rests on the part y seeking the appointment. Benefield v. State , 266 S.W.3d 25, 32 (Tex. App.–Houst on [1st Dist.] 2008, no pet.). We note the records in this case were filed under seal. We have reviewed the records, and we conclude Hillwood did not present evidence raising a f act issue. Hillwood argues the Mavericks are insolvent because the Mavericks have not been able to fund their expenses from the operations of the team in the past, and they project that this inabi lity will continue in the future. Hillwood argues the Mavericks similarly ha ve no ability to repay the debts the team has already incurred. Hillwood’s ar guments focus on the Mavericks’ inability to pay debts and–6– expenses from the income the team generates. Hillwood advances a definition of “insolvent” that is “prospective” in nature: the question, Hillwood argues, is not whether the Mavericks have paid all of their debts to date; the question is wh ether the Mavericks are able to pay all of their debts “as they become due.” Hillwood asserts its definition of insolvency authorizes a receivership under secti on 11.404(a)(1)(A) when the entity alre ady owes debts it is unable to pay

or the entity’s debt load is “fas t approaching a level that is be yond its ability to pay.” Hillwood asserts this does not mean, as the Mavericks “wish to construe it,” that this Court must find “the entity has already defaulted in th e payment of its debts or is exp ected to do so in the immediate future.” In support of its arguments, Hillwood cites Finner ty’s assertion that “[t]he inability to pay debts as they come due is a forward-looking te st, in which the financial analyst evaluates an entity’s ability to meet all of its obligations as they mature.” In forming his opinion that the Mavericks are “insolvent on a stand-alone basis, ” Finnerty essentially di sregarded third-party contributions to the Mavericks even though Finne rty conceded the Mavericks were “entirely dependent” on those contributions. Hillwood c ites no authority, and we have found none, to support an interpretation of “insolvency” that would involve disregarding a historical and ongoing pattern of continuing financia l contributions from third part ies. Further, even assuming the test for the inability to pay debts as they come due is a “forward-looking test,” the test remains whether the entity is insolvent or in imminent danger of insolvency. See T EX . B US
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. C ODE A NN . § 11.404(a)(1)(A) (West 2012). While the test for insolvency may “look forward,” it may only look forward to determ ine whether insolvency is “imminent.” See id. We do not interpret section 11.404(a)(1 )(A) to permit a “look forward” to a hypothetical future in which third parties abandon the Mave ricks, leaving them with the current debt a nd no ability to repay it on their own. We conclu de Finnerty’s affidavit raised no genuine issue of material fact–7– that the Mavericks are unable to pay their debts as they become due in the usual course of business or affairs. See T EX . B US
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. C ODE A NN . § 1.002(40) (West Supp. 2014). Further, Hillwood did not raise an issue of fact about whet her the Mavericks have failed to pay any debts as they have come due. Accord ingly, the trial court did not e rr by granting summary judgment in favor of the Mavericks on Hillwood’s claims. See Chapman , 118 S.W.3d at 751. We overrule Hillwood’s first issue. In its second issue, Hillwood argues the trial court abused its disc retion in entering its order sealing certain documents. Court records are presum ed to be open to the public, and a party seeking a sealing order must show: (a) a specific, serious, and substan tial interest which clearly outweighs: (1) this presumption of openness; (2) any probable adverse effect that sealing will have upon the general public health or safety; [and] (b) no less restrictive means than sealing records will adequately and effectively protect the specific interest asserted. T EX . R. C IV . P. 76a(1); McAfee, Inc. v. Weiss , 336 S.W.3d 840, 844 (Tex. App.–Dallas 2011, pet. denied). The party seek ing to seal the court records must pr ove the elements of rule 76a(1) by a preponderance of the evidence. Wood v. James R. Moriarty, P.C. , 940 S.W.2d 359, 361 (Tex. App.–Dallas 1997, no pet.). We review the trial court’s ruling on the rule 76a motion under an abuse of discretion standard. Id. The test for abuse of discreti on is not whether the facts present a proper case for the trial court’s action. Id. Rather, the test is whether the trial court acted without reference to any guiding ru les or principles or acted in an arbitrary or unreasonable

manner. Id. (citing Downer v. Aquamarine Operators , 701 S.W.2d 238, 241-42 (Tex. 1985). Rule 76a provides the guiding rules and pr inciples for sealing court records. Id. An abuse of discretion does not exist when the trial cour t bases its decision on conflicting evidence. Id.–8– When we review matters committed to the tr ial court’s discretion, we may not substitute our judgment for that of the trial court. Id. Even if we would decide the issue differently, we may not disturb the trial c ourt’s decision unless it is ar bitrary and unreasonable. Id. In a nonjury trial or hearing, the trial judge is the sole judge of the witnesses’ credibility and the weight given their testimony. Id. Here, the trial court’s order granting the Mavericks’ motion to seal stated the court’s finding that the Mavericks and the NBA’s “financi al interests in the confidential, proprietary and/or trade secret nature of the materials” sealed constituted serious and substantial interests clearly outweighing the presumption of openness a nd any adverse effect sealing the materials might have on public health or safety. Further, the trial court found there were no less restrictive means other than sealing the records that would adequately and effectively protect the specific interests of the Mavericks and the NBA. The sealed documents contai n financial projections, confidential financial information generated by the NBA, and current and past financial statements. The trial court had before it affi davits showing the confidential nature of the financial information contained in the sealed documents and the fact that collective bargaining negotiations were ongoing at the time. The tr ial court also had before it the documents themselves, which the trial court reviewed in camera . We have reviewed the record, and we conclude the trial court did not abuse its disc retion in sealing the ma terials under rule 76a. See T EX . R. C IV . P. 76a; McAfee , 336 S.W.3d at 844. We overrule Hillwood’s second issue. We affirm the trial court’s judgment.

111470F.P05 /David L. Bridges/ DAVID L. BRIDGES JUSTICE–9– 

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Court of Appeals Fifth District of Texas at Dallas JUDGMENT

HILLWOOD INVESTMENT PROPERTIES III, LTD, Appellant No. 05-11-01470-CV V. RADICAL MAVERICKS MANAGEMENT, LLC, AND DALLAS BASKETBALL LIMITED D/B/A DALLAS MAVERICKS, Appellees On Appeal from the 192nd Judicial District Court, Dallas County, Texas Trial Court Cause No. 10-05639. Opinion delivered by Justice Bridges. Justices Moseley and Lang-Miers participating.

In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED

. It is ORDERED that appellee RADICAL MAVE RICKS MANAGEMENT, LLC, AND DALLAS BASKETBALL LIMITED D/B/A DALLAS MA VERICKS recover their costs of this appeal from appellant HILLWOOD INVESTMENT PROPERTIES III, LTD. Judgment entered August 21, 2014