By Zach Arnold | February 5, 2008
Update: A source who has read the summary of the lawsuit filing sends this (case no: 08 A 556504):
Plaintiff purchased certain assets of defendant’s business under the Pride, Pride Fighting Championship and Bushido brand names. Because plaintiffs are involved in the gaming industry, defendants were required to cooperate with and submit to background checks and drug tests to ensure compliance with the regulatory requirements of plaintiff’s gaming license. Defendants failed to cooperate with, submit to or pass such background checks, defrauding plaintiffs into entering the agreement for “millions upon millions of dollars.”
The judge assigned to the case is Mark R. Denton and the lawsuit was filed on the 1st. PFC worldwide’s attorney in the case is Daniel Polsenberg. If anyone can access the 29-page court filing, please let me know.
Update II: From Sherdog:
A source close to DSE told Sherdog.com on Tuesday that Sakakibara was preparing his own suit against the Fertittas for breach of contract stemming from the decision to shut Pride down last October.
Fightlinker sums up the mess UFC is in right now.
A strange news item today from Dave Meltzer claims that PRIDE FC Worldwide, the company UFC set up for the PRIDE asset sale transaction, is going to sue Dream Stage Entertainment for fraud in relation to the PRIDE asset sale agreement.
Why is it a curious move? Because the lawsuit, if true, would likely justify the notion (in my opinion) that UFC’s due diligence on the PRIDE asset sale deal was inefficient in finding out what was real and what wasn’t. At the time the deal was made, it was extremely questionable on several levels.
The biggest conundrum that Zuffa faced with their deal with DSE (and may face now in civil court) is the yakuza angle. Everyone in the MMA business knew about the Shukan Gendai yakuza angle and understood that the scandal put DSE in the precarious position that it was in before the asset sale was made. I always questioned why Zuffa pulled the trigger on the deal, considering that it put the gaming license of the Fertittas in a tenuous position with the Nevada Gaming Commission (they don’t like any deals with organized crime).
In order for Zuffa to claim that DSE defrauded them on the asset sale, it would basically be admitting that Zuffa’s due diligence didn’t foresee some of the apparent problems in the evaluation of the PRIDE’s assets. For example, it was long-rumored that DSE didn’t own 100% of the rights to their video footage (Fuji TV produced a lot of the big shows), which may be a possible reason as to why we haven’t seen UFC extensively use PRIDE’s video library.
Zuffa’s reported lawsuit against DSE opens up a major can of worms for a lot of parties and some of the surprises may not be good for UFC in court. Besides the Nevada Gaming Commission having some interest in the lawsuit, you can bet that Ed Fishman will be interested in the proceedings. Additionally, I would expect that some fighters who did not get paid by DSE before PRIDE shut down might consider filing an attachment (lien) on whatever earnings Zuffa gets in the civil suit (think: Miro Mijatovic’s lien attachment on the Seiya Kawamata lawsuit against Nippon TV.)
If the civil suit (through deposition and discovery) reveals deep yakuza relations in DSE (affirming Shukan Gendai’s claims), then it’s going to put Zuffa in quite an interesting PR situation.