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By Michael Rosenthal
Mike Tyson has won a $1.2 million-plus-interest judgment in U.S. Bankruptcy Court against multiple en******, including British promoter Frank Warren, for money he was owed after he fought Danny Williams in 2004.
A portion of any recovery will go to the IRS to pay off Tyson’s tax debt. Tyson will receive the remainder.
Tyson was to be paid $7.2 million for the July 30, 2004 fight in Louisville, Ky. However, before the fight took place, Straight-Out Promotions – co-promoter of the fight – indicated it didn’t have enough money to pay the full amount.
To save the fight, the obligation to pay Tyson was assigned to a Gibraltar corporation called Brearly and tied to international television revenues. However, when it came time to pay up, Brearly claimed it had no obligation to make good on the debt. Warren claimed to have no connection with Brearly.
Thus, a lawsuit was filed in New York and U.S. Bankruptcy Judge Allan J. Gropper ruled in Tyson’s favor.
Gropper wrote in his ruling that Brearly was not what Warren and his promotional vehicle Sports Network purported it to be. The judge called it, “a corporate shell, with no employees, capital or business, used as a ‘façade concealing true facts.’”
Gropper wrote: “Based on the credible testimony at trial, the Court has no doubt that the UK Defendants used Brearly in the transaction to mislead and injure. In words appropriate in the boxing world, it was a perfect set-up. … Based on the evidence of record, the Court concludes that the UK Defendants used Brearly as part of a scheme or ruse to accomplish Warren’s goals: have Williams fight Tyson and possibly go on to secure a championship fight for Sports Network, while avoiding any liability to Tyson and Straight Out. Under English law, Brearly’s corporate veil must be lifted, with the result that the UK Defendants are liable for the contractual obligations that they undertook in Brearly’s name in connection with the Fight.”
Tyson was not awarded the full $1.4 million because the defendants were able to demonstrate that they accrued expenses.
Alan Kornfeld, one of the attorneys representing Tyson’s bankruptcy estate, was pleased with the decision.
“We’re very satisfied with the court’s decision,” Kornfeld said. “We wanted to hold Frank Warren liable and the judge held for us on that issue. Mike wasn’t paid what he was owed so steps were taken to get him what he should have been paid. We’re gratified.”
Attorneys for the defendants could not be reached.
Mike Tyson has won a $1.2 million-plus-interest judgment in U.S. Bankruptcy Court against multiple en******, including British promoter Frank Warren, for money he was owed after he fought Danny Williams in 2004.
A portion of any recovery will go to the IRS to pay off Tyson’s tax debt. Tyson will receive the remainder.
Tyson was to be paid $7.2 million for the July 30, 2004 fight in Louisville, Ky. However, before the fight took place, Straight-Out Promotions – co-promoter of the fight – indicated it didn’t have enough money to pay the full amount.
To save the fight, the obligation to pay Tyson was assigned to a Gibraltar corporation called Brearly and tied to international television revenues. However, when it came time to pay up, Brearly claimed it had no obligation to make good on the debt. Warren claimed to have no connection with Brearly.
Thus, a lawsuit was filed in New York and U.S. Bankruptcy Judge Allan J. Gropper ruled in Tyson’s favor.
Gropper wrote in his ruling that Brearly was not what Warren and his promotional vehicle Sports Network purported it to be. The judge called it, “a corporate shell, with no employees, capital or business, used as a ‘façade concealing true facts.’”
Gropper wrote: “Based on the credible testimony at trial, the Court has no doubt that the UK Defendants used Brearly in the transaction to mislead and injure. In words appropriate in the boxing world, it was a perfect set-up. … Based on the evidence of record, the Court concludes that the UK Defendants used Brearly as part of a scheme or ruse to accomplish Warren’s goals: have Williams fight Tyson and possibly go on to secure a championship fight for Sports Network, while avoiding any liability to Tyson and Straight Out. Under English law, Brearly’s corporate veil must be lifted, with the result that the UK Defendants are liable for the contractual obligations that they undertook in Brearly’s name in connection with the Fight.”
Tyson was not awarded the full $1.4 million because the defendants were able to demonstrate that they accrued expenses.
Alan Kornfeld, one of the attorneys representing Tyson’s bankruptcy estate, was pleased with the decision.
“We’re very satisfied with the court’s decision,” Kornfeld said. “We wanted to hold Frank Warren liable and the judge held for us on that issue. Mike wasn’t paid what he was owed so steps were taken to get him what he should have been paid. We’re gratified.”
Attorneys for the defendants could not be reached.
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