Players seek San Antonio bankruptcy court approval for soccer league collapse settlement

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It has been almost two and a half years since the Alliance of American Football abruptly ceased operations and filed for bankruptcy.

Now, the league’s 400 or so players could receive payments as part of an agreement to settle a lawsuit filed in the bankruptcy case against the league and its backers.

He asks each of the players to receive a priority salary claim of $ 13,650 in connection with the loss of salary for the last two games, which were never played, during the only season of the AAF in 2019. .

Each player will also receive a claim of $ 180,000 covering the salary he was supposed to have received in the last two years of his three-year contract. This claim is however subject to payment by the bankruptcy body of the claims of other creditors.

Lawyers for the players, the bankruptcy trustee overseeing the Chapter 7 case and AAF founder and CEO Charlie Ebersol on Monday asked a bankruptcy judge to grant preliminary approval of the settlement.

U.S. bankruptcy judge Craig Gargotta, however, said he would render his ruling on the claim on September 28.

“I want to think about it,” he said after an hour-long hearing.

The AAF’s inaugural season ended abruptly after eight games in April 2019 when majority owner Thomas Dundon suspended football operations. About two weeks later, the league filed for bankruptcy in San Antonio. Dundon is the majority owner of the Carolina Hurricanes of the National Hockey League.

Aaron Green brings together blockers in downtown San Antonio as the commanders face San Diego at the Alamodome in the 2019 Alliance of American Football League opener. The league has folded before ending its first season.

Photo file

San Antonio was among the cities to field a team in the AAF. He was known as the Commanders.

Two AAF players – Colton Schmidt and Reggie Northrup – sued the league, Ebersol and Dundon for fraud, breach of contract and other claims regarding the league’s collapse. The lawsuit became part of the bankruptcy.

The players want Gargotta to certify the case as a class action lawsuit. The judge will also likely render his decision on that claim at the hearing scheduled for later this month.

An amended version of the lawsuit which was filed in February 2020 alleges players were misled and swindled by Ebersol and Dundon.

Ebersol has promised that the AAF development football league could provide players with a “potential path” to the National Football League, according to their complaint.

“In reality, the AAF was created by Ebersol to be a technology company, not as a development football league,” the players’ costume added.

The league was developing gaming technology to allow viewers to bet on every game during a match using their mobile devices. He planned to license the technology to other leagues, the lawsuit said.

USA Today reported – before the league closed – that technology “could revolutionize professional sports and gambling.”

The AAF was created to use players as “lab rats” to test technology, the players said in their lawsuit.

The players have about $ 700 million in bankruptcy receivables.

MGM Resorts International, which has invested $ 7 million to fund the development of the technology, ended up with it in a 2019 sale approved by the judge.

Dundon, who has $ 70 million in AAF bankruptcy claims, opposed the settlement agreement.

He alleged that the bankruptcy trustee, who is involved in the settlement, is paying for “what appears to be” Ebersol’s “cooperation and future testimony as a witness in a future litigation against third parties to this settlement” – including Dundon – in exchange for the release of claims against Ebersol.

Brent Hockaday, Dundon’s attorney, noted that Ebersol pays no consideration for opting out of the case other than his cooperation.

“It sounds a lot like a plea deal that you see in the criminal context,” Hockaday told the judge. “And that is not something, as I understand it, that is available in the civilian context.”

Under the settlement agreement, the players do not release any non-wage claims against Dundon.

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