Disgruntled NBL club owners will launch an appeal after the NSW Supreme Court threw out their long-running bid to access financial documents from the basketball league.
But Illawarra and South East Melbourne risk severe action from the league by challenging the ruling, which could range from a warning to termination of their licences, as the NBL considers its options.
Hawks owner Jared Novelly waged war against the NBL earlier this year over perceived issues with the league's financial transparency and distribution of revenue to its clubs.
Novelly also questioned whether NBL owner Larry Kestelman's extensive portfolio had presented conflicts of interest in operating the league, which the telco mogul bought in 2015.
Rival club South East Melbourne had joined Illawarra in their fight, which was first heard in the Supreme Court in May.
But on Friday, the Court permanently stayed the proceedings, determining the clubs had breached a clause in their licence that prohibited taking legal action against the NBL.
The clubs' licences stipulate any grievances must be aired in the Court of Arbitration for Sports, not the Australian court system.
Crest Sports and Entertainment, Novelly's investment firm, has since flagged its intention to appeal, believing the decision to stay proceedings hinged on a technicality.
"Today's ruling was on a stay application only and turned on a technical point after the court rejected NBLCo's primary argument. It should not be misrepresented as an exoneration of NBLCo's conduct (which the court has not yet examined)," Crest said in a statement provided to AAP.
Privately, Crest believes its case has been strengthened since filing the initial court proceedings with the NBL relocating its Melbourne offices to a building owned by Kestelman's property group.
It has previously engaged in partnerships with Reebok while Kestelman owned equity in the sportswear brand and given merchandising rights to a clothing label founded by Kestelman's son.
"Fundamental issues such as lack of transparency and financial disclosure remain unchecked and must be addressed," Crest's statement read.
"Many team owners are concerned that millions of dollars of distributions may have been improperly withheld from clubs. This discovery application was simply an effort to obtain information that should already be available, as it would be in any other sporting code."
RC Aussie Hoops, the ownership group behind the Phoenix, echoed Crest's sentiments in a statement provided to AAP.
"NBLCo must be held to account for its lack of transparency, blatant conflicts of interest and shameless self-dealing," the statement read.
"Today's judgement is based on a jurisdictional technicality and should not be misrepresented as clearing the NBLCo of potential wrongdoing."
As it stands, the Hawks and Phoenix will be forced to pay the NBL's legal costs and could be sanctioned for breaching their licences.
The NBL is in the early stages of considering its options.
In a statement on Friday, the NBL called the Supreme Court's findings "an important moment for the NBL and Australian basketball".
"It reinforces the need for all parties to respect their contractual obligations and to act consistently within the proper governance of the league," the NBL said.
"We hope today's decision allows all parties to move forward. The NBL remains focused on what matters most: strengthening the competition, supporting its clubs, and delivering world-class basketball to fans in Australia, New Zealand and around the world."
Basketball Australia has not yet shared the outcome of its own investigation, which launched earlier this year.
