The billionaire Carolina Hurricanes owner wants his $70 million investment back.
Former Alliance of American Football owner Tom Dundon alleges that the league initially told him it only needed $55 million to get through one season when he invested but in reality needed $120 million–more than twice what he was told–in a revealing legal filing in bankruptcy court.
Dundon filed as an unsecured creditor of the bankrupt league, who's short existence culminated in an incomplete inaugural season. He charged that he was induced into buying the league through “misrepresentations" and is seeking the $70 million he invested in the league based on the inaccurate representations.
The Carolina Hurricanes billionaire owner alleges, in documents obtained by The Athletic, that he was told that $55 million would get the now-defunct league through one season and the remainder of his $250 million investment would be used in subsequent seasons.
“The AAF further represented that it could survive the season with only $55,000,000, leaving substantial capital to prepare for the following season,” Dundon’s filing charges state. “During the weeks following the execution of the Term Sheet, DCP learned a number of alarming facts that revealed that the AAF was not forthcoming with Dundon and DCP. DCP 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 DCP prior to the execution of the February 14, 2019 Term Sheet.”
Without sufficient capital from the start and funds depleting rapidly, AAF co-founder Charlie Ebersol sold a controlling interest in the league to Dundon, who invested $250 million into the NFL alternative just 10 days after its first game but backed out in Week 8 after having only paid $70 million.