Tom Dundon wants his $70 million back from the AAF

AP

Carolina Hurricanes owner Tom Dundon is having a case of buyer’s remorse. But it could be too late for Dundon to get a refund.

Daniel Kaplan of TheAthletic.com reports that Dundon has filed a claim in the Alliance of American Football’s bankruptcy case. Dundon alleges that his investment happened due to “misrepresentations,” and he seeks a full refund of the $70 million he paid to keep the league afloat for five or six weeks during its only season, before Dundon shuttered it.

“Even though AAF executives told [Dundon Capital Partners] its contribution would get the AAF through the first season, those executives knew at the time of the execution of the Term Sheet that the AAF would likely need an additional $50,000,000 (including League revenue) on top of [Dundon Capital Partners’] investment of up to $70,000,000 to get through the first season,” the document alleges. “The AAF and its executives never disclosed this information to [Dundon Capital Partners].”

In other words, Dundon claims that the AAF led Dundon to believe that an infusion of $70 million would get the league through its first season, but that the AAF knew that in reality $120 million would be required. More specifically, Dundon claims that the AAF led him to believe that an amount considerably less than $70 million would be needed to finish the campaign.

“The AAF further represented that it could survive the season with only $55,000,000, leaving substantial capital to prepare for the following season,” the document contends. “During the weeks following the execution of the Term Sheet, [Dundon Capital Partners] learned a number of alarming facts that revealed that the AAF was not forthcoming with Dundon and [Dundon Capital Partners]. [Dundon Capital Partners] learned that, in addition to not having the funds to pay salaries after the first week of the League’s games, the AAF also had accumulated more than $13,000,000 in unpaid debts and commitments. The AAF did not disclose these unpaid debts or commitments to [Dundon Capital Partners] prior to the execution of the February 14, 2019 Term Sheet.”

Dundon also contends that the AAF failed to disclose the existence of “ongoing threatened litigation from a past associate who claimed to be a co-founder of the League and who was suing to obtain a 50% interest in the AAF.”

With precious few assets available to be distributed to the AAF’s many creditors, Dundon’s filing feels like the first move in a fresh game of chess/checkers/chicken against those who lured him to pump millions down what ultimately became (and possibly already was) a dry hole. Dundon could be trying to ensure that creditors won’t target him personally, he could be trying to lay the foundation to target personally those who lured him into the business, and/or he could simply be trying to ensure that the record is clear and unambiguous in the event the pending legal proceedings eventually take a southerly turn from the civil justice system.

60 responses to “Tom Dundon wants his $70 million back from the AAF

  1. What is INSANE is that it WAS POPULAR with fans going to and watching the games and enjoying the product at that time of year. Looks like Vince McMahon will learn from all their mistakes.

  2. None of these leagues will make it, unless they have a solid tv contract in place. The revenue needed to start up a league is enormous. Even the leagues that made it over the years struggled and barely succeeded. 70’s nba championships on tape delay, packers selling stock to survive in the 50’s, even the usfl, which our brilliant president (just ask him) was involved with didn’t make it.

  3. You would think that Tom might have done a little more due diligence before he handed over the 70 million dollar check.

  4. exinsidetrader says:
    June 25, 2019 at 1:07 pm
    What is INSANE is that it WAS POPULAR with fans going to and watching the games and enjoying the product at that time of year. Looks like Vince McMahon will learn from all their mistakes.

    ————————

    No one was going to the games and it wasn’t popular. They wouldn’t even show the crowd on TV because of how bad it was. Most people I knew didn’t even know their was a league being played. McMahon is making many of the same mistakes and will fail as well. Might make it two seasons but he too will find out that this country loves NFL football, not some knockoff with bad QB play going on in February and March.

  5. i’d like all the money back that i have spent on losing lottery tickets too…

  6. Makes me think of Joe Pesci from Casino when he’s threatening the banker.

    …and just about the time I’m comin’ out of jail, hopefully, you’ll be coming out of your coma. And guess what?

  7. With the dollar amounts described in the multitude of lawsuits filed, this is not a business failure, but an outright fraud. People need to be prosecuted so jury can sort it out.

    Unfortunately, with a bunch of rich men involved, I predict no one is even charged.

    Its like the NFC Championship game but with wealthy, white guys with lawyers.

  8. Everyone has money problems. Trump, Buffet, the hobo down the street, and this guy. All of them are simply a little different!

  9. Sorry, chalk it up to a bad investment. Just ask R Murdock about losing a billion on MySpace.

  10. LMAO!
    Dunden you came in trying to again make money off of others backs and you lost your gamble. Be an adult and be accountable.

  11. If these clowns can declare bankruptcy and walk away paying pennies (if that) on the dollar because of their lousy business acumen, why on earth can’t my millenial son (and the sons and daughters of so many of us on PFT) declare bankruptcy because of the damn student loans the university encouraged him to take out with all the BS about how a degree from their institution would practically guarantee him a great job? If the millionaires and billionaires can declare bankruptcy willy nilly the way they do with basic impunity, why can’t our kids do the same thing with the loans that have essentially ruined their chances of ever owning homes or getting ahead financially in life? The bankruptcy laws, like so many laws in our country, screws the common folk. Meanwhile, guys like Biden and Trump preen and speechify about how they’re looking out for our interests. I call BS on this corrupt system and the arrogant ahole politicians and their buddies who get rich on it while the rest of us often have trouble making basic ends meet at the end of the month.

  12. Let’s also be clear here that Bill Polian was one of the liars and cheats who misrepresented everything to investors

  13. Class warfare rhetoric at its worst in this article.
    Guess who employs the “common folk”?
    RICH folk!
    I have yet to be employed by, receive benefits from, or sign a contract for services from a poor person.
    If you don’t like how the rich (aka employers) get around the law, then blame the LAWMAKERS..not the rich folk.
    Coincidentally, guess who politicians go to for campaign contributions? NOT poor people…they go to the very rich folk that this article tries to impune.

  14. I doubt he didn’t do his due diligence. I imagine he is doing this because he looks like an arse and he is trying to look slightly better than the jerk he really is. At this point I am willing to believe he did this at the behest of NFL ownership.

  15. nfloracle says:
    June 25, 2019 at 2:05 pm

    why on earth can’t my millenial son (and the sons and daughters of so many of us on PFT) declare bankruptcy because of the damn student loans the university encouraged him to take out with all the BS about how a degree from their institution would practically guarantee him a great job?

    ———————-
    OAC has you covered. She says she will get those forgiven. And the rich people are going to pay for it.

  16. I’ve been waiting for some investor(s) to file suit directly against Ebersol for fraud. I’d have thought outside investment would have been near zero if people knew there wasn’t even enough money on hand to get them through 2 weeks.

    You cannot overstress the insanity of not only expecting a new business to turn a profit in Year 1 but to INSTANTLY be turning a profit straight out of the gate from Day 1. They literally were hoping to pay for 80% of the season off of incoming revenue and/or new investments throughout the season. That is just nuts and absolutely nobody would have invested if they’d known that upfront.

  17. Hard to feel bad for a billionaire that didn’t carefully conduct due diligence before making a 70 million dollar investment. No amount of fraud should be able to conceal the claims this guy is making. Not that it matters since there is no one around with any money anyway.

  18. So it’s pretty disgusting when you make horrible investment decisions and think that anyone should feel pity for you. That goes from the extreme rich to the extreme poor. If you can’t tell Bill Polian was a snake with no real idea on running a business then adios 70 mm.

  19. dryzzt23 says:
    June 25, 2019 at 2:30 pm
    Class warfare rhetoric at its worst in this article.
    Guess who employs the “common folk”?
    RICH folk!
    I have yet to be employed by, receive benefits from, or sign a contract for services from a poor person.
    If you don’t like how the rich (aka employers) get around the law, then blame the LAWMAKERS..not the rich folk.
    Coincidentally, guess who politicians go to for campaign contributions? NOT poor people…they go to the very rich folk that this article tries to impune.
    —————————————————–
    Its uniformed voters like you fella that are going to lead us right back into the Gilded Age just like YOUR rich master would like….

  20. Hah, he’s the reason it went belly up and he wants his money back? One question for you, Dundon, if you thought it would “only” take 55 million for the league to run, why did you write a check for 70million…that you ANNOUNCED as 250 million? Yeah, you’re the real victim here…

    Don’t forget that last little detail. He pledged 250, even though the poor thing was led to believe they only needed 55. He interviewed about it, even, and that was the number cited. Blame Ebersol and Polian all you want for poor planning, but their only crime was being too optimistic. Dundon? Plain old greed.

  21. Bill Polian, like usual, is holding court at some bar claiming what could have been.
    Dundon, like many of those before him in various professional sport leagues, got caught up in working with the so called powers to be. Yet, they are really has been’s based on media and fan perception. With no business sense at all, let alone running a franchise or a league, it was like taking money from a baby…

  22. I have what I believe to be a relevant question here: How could a league with so few teams, playing in small stadiums, paying its players virtually nothing and WITH a TV contract, need $120 Million (Dundon’s 70 plus the estimated 50 that is quoted) to cover costs for one season?

    I think as we peel the onion here we are going to find that some of this money was not spent on what it was intended for and wound up parked in the Cayman Islands.

  23. Best part about this league failing is that Bill Polian will never be heard from again!

  24. This guy took over a great football enterprise and then got scared after he figured out he didn’t know anything about football, and decided to quit. This guy is the biggest joke I’ve seen in the history of pro sports leagues. He’s the epitome of All Hat And No Cattle. If the AAF was in the hands of the right person, it could have made Billions $$$. Still could if someone wants to run it, but they have to understand how to run a league like that. It’s not the NFL. Can’t try to copy the NFL. College football isn’t the NFL and they do alright, but they don’t try to be the NFL.

  25. The sixth pick says:
    June 25, 2019 at 2:39 pm
    nfloracle says:
    June 25, 2019 at 2:05 pm

    why on earth can’t my millenial son (and the sons and daughters of so many of us on PFT) declare bankruptcy because of the damn student loans the university encouraged him to take out with all the BS about how a degree from their institution would practically guarantee him a great job?

    ———————-
    OAC has you covered. She says she will get those forgiven. And the rich people are going to pay for it.

    =============

    AOC you mean? And if this happens, those of us who busted their collective arses to pay our student debts will riot in the streets. Pay your bills. Don’t expect us taxpayers to do it for you.

  26. What is that saying? A fool and his money are soon parted. Before you sink a nest egg into something, at least check that the basket has no holes

  27. I heard he talked to Drew Brees about it. Drew said it was a lock. Drew also said he’d would invest if he could but it wouldn’t look right by being an active NFL players.

  28. he should have stayed in the NHL if he wanted sure things and guarantees.
    He’s acting like a kid who got ripped off at the county fair

  29. Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!!!!!!!!!!!!!

    What a sucker.

  30. I hope he takes he reduces bill polian to living in a rented single wide and then takes his ill begotten HOF jacket out of the closet and bogus SB ring off his bony finger.

  31. Where’s the money going to come from? This is like suing a person with no income and a bunch of debt.

  32. “Where’s the money going to come from? This is like suing a person with no income and a bunch of debt.”

    I’m sure with enough lawyers and political donations, he’ll end up having taxpayers somehow foot the bill.

  33. SO Dundon is going to sue himself?

    You WERE THE AAF when u became the principal investor.

  34. I wonder how much money the NFL or the old AFL made in their first seasons. Chances are they lost money. They’re making tons of money now. Generally you don’t make money your first season. I think Dundon knows all that. He also claimed to have $250 million to put into the league last year. I’d say he probably just changed his mind and found a different investment. He’s just playing this game to try to get a free $70 million from someone. I thought the league was off to a great start. They needed to tweak somethings, but that takes a year or two. I don’t think anybody misled anybody. This guy reminds me of someone else I’m reading about every day.

  35. People here are blaming Dundon?

    The people who deserve actual blame are Ebersol and Polian, the architects of a league that seems to have been constructed with no business plan whatsoever.

  36. realitypolice says:
    June 25, 2019 at 3:40 pm
    I have what I believe to be a relevant question here: How could a league with so few teams, playing in small stadiums, paying its players virtually nothing and WITH a TV contract, need $120 Million (Dundon’s 70 plus the estimated 50 that is quoted) to cover costs for one season?

    I think as we peel the onion here we are going to find that some of this money was not spent on what it was intended for and wound up parked in the Cayman Islands.
    ______________________________________________________________________________________
    I have been asking this question since day 1 ,I would love to see what a forensic accountant finds on this deal ,something stinks

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