Depending on whom you ask, the legal battle between Gennadiy Golovkin and his former managers, brothers Oleg and Maximillian Hermann, is either plowing forward like a diesel locomotive or inching along like a polar ice sheet.
Either way, tensions are mounting.
Golovkin, the IBF's middleweight titleholder from Kazakhstan and one of the top names in boxing, sued his ex-managers for a minimum of $3.5 million in January 2019 for breach of fiduciary duty, among other claims. The Hermann brothers fired back the following May with their own countersuit, alleging it is Golovkin who owes them money, to the tune of $27.4 million. The case, which is being tried in California, is probably the most significant legal schism currently between an active, high-profile fighter and his former handlers in a sport that is no stranger to issues of malfeasance.
“I think there is a trial setting conference later this year at which point the court will set a trial date and we’ll be moving forward,” said Sasha Frid, one of the attorneys representing the Hermann brothers. “Full steam ahead.”
Not so fast, says Pat English, one of the attorneys representing Golovkin. Just as the Covid-19 pandemic has upended fights cards, it has also disrupted what some in the industry half-cheekily regard as the sport’s lifeblood: litigation.
“Understand that the courts in California are all but shut down,” said English, a veteran of the boxing world and who serves as chief counsel for promoter Main Events. “We did have a hearing the other day. It was the first day they did a tele-video hearing and it was half a disaster …they’re trying but it’s a mess. And this is a jury trial case. Literally, there won’t be a trial until 2022. (There will be a) big backlog.”
Added English, “This is one of the slowest moving cases I’ve ever been a part of. Glacial speed.”
It is also at heart, according to both sides, a very simple case that boils down to how a court will determine when a managerial relationship ended.
On the one hand, the Golovkin camp contends that the relationship ended in 2017, sometime after Golovkin’s first fight with Canelo Alvarez. They allege in their complaint that the Hermann brothers “provided no significant services, and played no particular role,” in Golovkin’s two bouts in 2018 involving Vanes Martirosyan and Alvarez in a rematch. The Golovkin camp maintains that their fighter was right to terminate the relationship because the managers had never been formally licensed as such and no terms of duration had ever been assigned to the original agreement. Moreover, they allege that the Hermann brothers were overpaid in their managerial commissions, extracted commissions from things that were not commissionable (like sponsorship deals), and that they are holding onto valuable memorabilia and other property that rightfully belongs to Golovkin.
In the complaint, the Hermann brothers are characterized as “boxing neophytes with no experience to be managing a boxer of Golovkin’s stature.”
On the other, the Hermann brothers, both German citizens, maintain that the relationship was in full effect throughout 2018 and only expired in February 2019, when, in their telling, Golovkin presented them with a termination notice for the first time. They claim they are still owed their 20% managerial cut for their services on the Martirosyan bout ($400,000) and the Alvarez rematch ($6 million). Furthermore, they claim they are owed a commission on Golovkin’s reported six-bout $100 million deal with streaming platform DAZN, which the fighter entered into in March 2019. The brothers assert that the suspicious timing of Golovkin’s termination notice – one month out from the signing of the DAZN deal – makes it clear that he simply wanted to avoid paying them their share ($20 million).
“As Golovkin began to earn ever larger sums of money, greed took over,” the Herman brothers stated in their cross-complaint. “…Instead of paying what he owes, Golovkin filed a lawsuit based on a fabricated story designed to deflect from him the fact that he has not lived up to his word and the agreement he made.”
The parties first met in April 2006 at a boxing card in Stuttgart, Germany, before Golovkin had fought in his first professional bout. They developed a friendship over the years and in 2009, via an oral agreement, the Hermann brothers agreed to manage Golovkin, according to the cross-complaint. (The Golovkin camp has questioned the binding nature of this agreement).
Today, Golovkin, 38, is one of the few boxers on the contemporary scene who has achieved some semblance of mainstream recognition. His 23-fight knockout streak and two pay-per-view bonanzas with Alvarez have brought him a high degree of worldwide celebrity uncommon for someone from the rustbelt of Eastern Europe with, to boot, a limited grasp of English. The Hermann brothers believe they deserve considerable credit for this development, from turning a virtual unknown toiling under a bad promotional contract in Germany into a popular middleweight titleholder with bonafide commercial appeal.
“Although corporate America has in recent years shied away from boxing, the Hermanns were able to carefully manage and cultivate Golovkin’s public image as a squeaky-clean good guy; and as a result, they were able to secure unprecedented marketing deals for Golovkin from corporate giants like Nike, Apple, Samsung, Hublot, Tecate, Chivas and others,” according to the cross-complaint.
“We found this guy, helped him get out of obscurity in Europe, got him out of a bad deal in Germany, brought him over (to the U.S.). Obviously he’s the one doing the fighting in the ring, but we helped get him great fights, great deals, great promotional deals and get him together with the right people,” Frid said. “We were responsible for his career and for his success in his career.”
Without their initial investment and guidance, the brothers contend, Golovkin wouldn’t be where he is today. Their early efforts included paying for the legal fees that got Golovkin out of his contract with Universum, the German promoter, as well as financially supporting his family “at substantial personal expense and sacrifice to themselves.”
“There are plenty of talented boxers who end up in obscurity,” said Frid, whose associate on the case is longtime Don King attorney John Wirt. “That didn’t happen here. We did our part and then he wanted to not pay us the commission and we said no. So he filed a lawsuit, a preemptive strike not to pay us what we’re owed. So that’s what the case is about.”
But all that, whether it is true or not, is essentially immaterial to the issue at hand, according to the Golovkin side.
“Apparently, they’ve (Hermann brothers) never heard of the 13th Amendment,” English said, referring to the historic clause in the United States Constitution that formally abolished slavery. “They seem to think that Gennadiy is a slave to them. Gennadiy quite properly dismissed them. And without any basis whatsoever in my view, they have sued to continue a relationship that is legitimately over.”
Chief among Golovkin’s allegations is that the partnership was “illegal and unenforceable” to begin with because the Hermann brothers were never properly licensed as managers in any of the states in which Golovkin had his biggest fights: California, Nevada, and New York. Golovkin has resided in Santa Monica, Calif. since 2013.
“We have laws in this country that require folks to be licensed, that in California requires management contracts to be no more than three years, which is where Gennadiy lives,” said English, who is working in tandem with attorney Kevin Gaut. “In most jurisdictions the time is limited and that’s for a simple reason. The policy decision has been made that you don’t enslave fighters.”
California Code of Regulations § 222 stipulates that “No contract shall be approved between a manager and a boxer or a promoter and a boxer for a period exceeding five years. No option to extend the initial period shall be permitted.”
The Hermann brothers have denied this, stating in their cross-complaint that they “obtained the licenses, approvals and authorizations that were required under state law to serve as Golovkin’s managers for his fights in the United States.”
“It wouldn’t bind any fighter”
For the Hermann brothers, this is a case about a fighter backtracking on a promise to pay his handlers what they’re owed.
For Golovkin, it’s about a pair of self-interested managers trying to squeeze another payday or two out of a relationship that had long run its course.
“They (Hermann brothers) made 7 million dollars (in commission from Golovkin),” English said. “Whatever they said they did, that doesn’t bind Gennadiy for life. Period. It wouldn’t bind Mike Tyson, it wouldn’t bind Lennox Lewis, Canelo. It wouldn’t bind any fighter.”
Golovkin also alleges that the Hermann brothers have been siphoning money of him for years by knowingly taking larger commissions and withholding certain revenue. The Golovkin camp alleges, for example, that the brothers never properly shared contracts or invoices on the foreign television deals that they entered into.
“They (Hermann brothers) put the money (from the TV deals) into their accounts in Germany,” English said. “They gave an accounting in the sense that they – lets say, $200,000 from Kazkhstan, to use an example — but it was an email nothing more. There are some contracts that we know of — at least one — that weren’t accounted for at all. In other words, money was taken in and not disclosed. So we allege we’ll have proof of that.”
English noted that Oleg Hermann was previously convicted of crimes.
“He was the head of a major product counterfeiting operation in Germany where they would do knockoffs of well-known brands (purses, attire, etc),” English said.
"Greed Changes People"
In their cross-complaint, the Hermann brothers point to the situation of Golovkin’s longtime trainer, Abel Sanchez, as additional evidence of Golovkin’s chicanery. The fighter and trainer bitterly parted ways over money shortly after Golovkin had signed his DAZN deal. The Hermann brothers claim that Golovkin “made an insulting offer to slash Sanchez’s commission,” as a way to avoid paying him a percentage of his purse from fights on the DAZN deal.
“Greed changes people, and Golovkin is no different,” the cross-complaint reads. “The Hermanns are not the only people who were there for Golovkin from the start that he is trying to stiff now that he is earning life-changing sums of money.”
But according to the Golovkin camp, it was the Hermann brothers who initially tried to cut Sanchez’s pay after Golovkin first broached the idea of re-negotiating his contract with his handlers, which included Sanchez as well as Tom Loeffler, the managing director of Golovkin’s then promoter K2 Promotions. Golovkin brought up the issue sometime after the first Alvarez fight in 2017 because he found he was “paying more than 45% of his fight purse (net of costs and before taxes) collectively to the Hermann Brothers as his managers, Abel Sanchez as his trainer, and his United States promoters,” according to the complaint. As a result, Golovkin wanted to reduce his overall commissions to 30%, so that Sanchez, Loeffler/K2, and the Hermann brothers would each take away no more than 10%.
“It’s very typical for fighters where they reach the stratosphere (re: purses) to renegotiate,” English said. “I’m not talking about breaking a contract. I’m talking about renegotiating new deals with the trainer and the managers, people who are working on a percentage basis. It’s very common, more common than not. Because 20% of $100,000 is very different from 20% of $10 million.”
Both Sanchez and Loeffler agreed to the new terms. The Hermann brothers did not. Moreover, the brothers responded in January 2018 with a counter offer via email that not only raised their own commissions, but reduced the commissions of Sanchez and Loeffler. Golovkin declined. An attempt to set up another meeting went unanswered by the Hermann brothers, according to Golovkin’s complaint.
“In the normal course, it would have been a normal, contract’s over, you go your way, we go ours,” English said.
The Hermann brothers acknowledge in their account that while they could not come to a new agreement with Golovkin, that did not mean the relationship was terminated. In fact, they assert that their contract “remained in effect throughout 2018 with the Hermann Management Team entitled to receive their full 20% management commission.”
The key year is 2018. That was the year of the highly hyped Alvarez-Golovkin rematch, which was initially delayed and then in danger of falling out altogether after Alvarez tested positive for a banned substance. That kerfuffle triggered a slew of administrative matters that required tending to with the utmost scrutiny, from getting a state commission’s approval on a substitute fight to renegotiating better terms for the Alvarez rematch. Golovkin says the Hermann brothers were absent during this period, that they simply “stopped providing managerial services.”
“A boxing manager typically would have been responsible for all of these events, but the Hermann Brothers, who by then were no longer communicating with Golovkin on such matters, played no role in any of them,” the complaint states.
The Hermann brothers have denied these claims, maintaining that they were involved in all of the important decision-making processes, including recommending Golovkin to sign with DAZN.
The German Contract
The Golovkin camp have claimed that there are a few kinks in the Hermann brothers’ account of how the managerial relationship arose.
According to Golovkin's complaint, the Hermann brothers broke their silence with the fighter two months after the Alvarez rematch by sending a letter of enforcement through their attorney. It was in this letter, Golovkin alleges, that the Hermann brothers first brought up the existence of a managerial contract that had been submitted long ago to the German Boxing Association. Golovkin professed to be shocked as he did not have any memory signing such a contract. Moreover, the terms of the GBA contract were different from the oral agreement that the brothers specified in their cross-complaint. Most notably it cited a 30% commission for the Hermann brothers.
In January 2019, the brothers threatened to obstruct Golovkin’s talks with DAZN by referencing this GBA agreement. Shortly thereafter, on Jan. 31, Golovkin filed suit (the one in question) against his managers. The Hermann brothers responded initially by trying to litigate the case in Germany. It was here, according to Golovkin’s complaint, that the Hermann brothers “concocted” a new story, when they realized that the written agreement had already expired in 2015, or well before the Canelo-Golovkin rematch.
In the end, the Golovkin camp claims the German judge threw out their case, citing credibility issues, which then led the Hermann brothers to file their current cross-complaint in California.
Golovkin has also accused the Hermann brothers of conflating their duties as managers, who carry a fiduciary duty to the fighter, with that of a promoter, who does not have that same obligation. The alleged breach falls under a key proviso of the Muhammad Ali Act, a federal law that was passed in 1999 to protect boxers from exploitation: 15 U.S.C. § 6308(b) stipulates that a promoter “cannot have a direct or indirect financial interest in the management of a boxer” and a manager, likewise “cannot have a direct or indirect financial interest in the promotion of a boxer.”
Golovkin claims that the Hermann brother broke this firewall vis-a-vis the international TV rights of his fights. Those rights are owned by the promoter K2, however, according to Golovkin, the sales of these rights went directly to the managers, thus forming the kind of “financial interest” that the Ali Act warns against.
The Hermann brothers have denied these allegations.
“We disagree with Golovkin’s claims,” Frid said in a statement. “We will address his allegations as the case proceeds and look forward to our day in court before a California jury.”
In an effort to protect themselves from Ali Act allegations, the Hermann brothers filed third-party indemnification complaints against current and former members of Golovkin’s inner circle, which includes his accountant Melissa Moskal, his then chief promoter K2 Promotions, and his then personal attorney Ron DiNicola. These indemnity cross-complaints, as they are termed under California law, are a way to “spread the blame,” so that in the event that the Hermann brothers are found at fault they would not be the only ones shouldering the damages.
“It is unfair and unreasonable for Golovkin to pin all of this potential liability on his managers when other professionals who owed him fiduciary duties share in this potential liability, and based on equitable principles they must be ordered to contribute their fair share to satisfy any judgment,” the brothers stated in their cross-complaint.
It should be noted that Moskal, K2, and DiNicola were not named in Golovkin’s original complaint.
In the case of Moskal, the Hermann brothers allege that her unique role as Golovkin’s accountant means she was aware of all relevant financial transactions, thus, in the Hermann brothers’ view, making her culpable should the court rule against them.
Moskal promptly filed an objection, or demurrer, which essentially grants the validity of the plaintiff’s factual points but opposes their legal argument. Under California law, moreover, a demurrer can only be granted if all the counts in a complaint are dismissed. Because of this high bar, demurrers are rarely successful.
Two weeks ago, the judge sided with the the Hermann brothers against Moskal, allowing the their cross-complaint to proceed. At the same time, the judge opined that the Hermann brothers could not sue Moskal for indemnity purposes related to the Ali Act allegations.
“Although our demurrer was overruled we do not believe the ruling was entirely unfavorable because the courts specifically agreed with our arguments on behalf of Ms. Moskal that the Hermann brothers have no private right of action or indemnity under this Muhammad Ali Act,” said Randall Dean, who represents Moskal. “The cross complaint is baseless. We expect the case will ultimately be dismissed against Ms. Moskal.”
English believes the Hermann brothers filed these complaints based on the notion that Golovkin was getting his advice from Moskal, as well as his wife, Alina.
“Before that third party complaint (against Moskal) was filed, we heard that they (the Hermann brothers) wanted to file against Alina Golovkin, as a way of putting pressure on Gennadiy, which it will not do.” English said. “It’s a fruitless effort. They couldn’t do it with respect to Alina.”
In a statement provided to World Boxing News last August, the Hermann brothers’ attorneys wrote, “We suspect that GGG’s wife, Alina. Plus his accountant, Melissa Moskal, are calling the shots for GGG. They are telling him what to do.”
“I can tell you, having had many, many discussions with Gennadiy, these decisions are Gennadiy’s, period,” English said. “They may or may not have thought that that was true, they certainly know it’s true now.”
DiNicola faces a similar indemnity situation. DiNicola is a prominent boxing attorney best known for representing Muhammad Ali. The Hermann brothers allege that DiNicola, while technically serving as Golovkin’s attorney, also expanded his role to serve them as well. The brothers relied on DiNicola for filing their managerial paperwork with state commissions and claim they repeatedly received assurances from DiNicola that he was representing them. As a result, they allege that DiNicola had a fiduciary duty to them. English sees this as another arm-twisting venture that does not hold water.
“They’re (Hermann brothers) not licensed, and as a way to excuse that, they’re claiming that Ron DiNicola was supposed to give them a license and didn’t, which I am convinced is completely frivolous,” English said. “I know Ron DiNicola. He didn’t represent them to begin with. He represented Gennadiy. It would be a conflict for him to represent them as well. That’s pretty frivolous.”
DiNicola’s attorneys declined to comment.
“That always bothers me when somebody alleges something they know not to be true for the purpose of keeping that in,” English said. “But that’ll get sorted out as the case goes on. People can’t just make things up and get away with it. Anywhere you litigate and you have to have facts. They will not prevail. They don’t have facts on their side.”