Showing posts with label lawsuit. Show all posts
Showing posts with label lawsuit. Show all posts

Saturday, December 27, 2014

Class Action Lawsuits Against Zuffa Set the Stage For an Interesting New Year

By: Rich Bergeron

Before you read this story, listen to Comedian Jim Gaffigan's take on legal documents for a good laugh:





Recently-filed class action cases brought by former and current UFC fighters against Zuffa, LLC are generating controversy and discussion from all corners of the MMA media. The first of these California-based cases hit the docket just as press releases went out to announce the filing. There was also a full-blown press conference celebrating the start of this intriguing course of litigation against the parent company of the Ultimate Fighting Championship, the undisputed world leader of the sport of mixed martial arts.



At first, Cung Le, Jon Fitch, and Nate Quarry (L-R above) were the three faces of the legal action. Another filing naming plaintiffs Javier Vasquez and Dennis Hallman hit the California docket Tuesday with language that is reportedly nearly identical to the other case. A third filing appeared on Christmas Eve, another lump of coal in Zuffa's stocking. This time it was Pablo Garza and Brian Vera as plaintiffs. Duplication of proceedings can be a nice way of forcing the other side to spend more money than usual defending the first salvo. If there is good reason for the cases to go on separately without quick consolidation, it will be three times the hearings the opposing lawyers need to attend, three times the paperwork, and three times the aggravation.

An initial  statement from the UFC indicated that they had not even been served the documents yet after the first round of stories emerged on the subject. Lawsuits traditionally begin with prompt service of documents, which involves someone called a process server, or in some cases a deputy sheriff or even a U.S. Marshall actually handing the lawsuit documents to the company representative. This is serious legal business, since you can't win if the opposition isn't even aware you're suing them. Some defendants try to play games to refuse or avoid service, but once they are served, the case is official. If the UFC persists in saying they have not seen the documents, the plaintiffs can also argue that service is already accomplished through publication, which is sometimes a last resort.

Examining the crux of the legal arguments in the initial filing, I can only conclude that the case makes a ton of legal sense to me. I would even say it does not go far enough. As a person who can say I've done legal battle with the attorneys for Fertitta Enterprises (a holdings and investment company owned by the same Fertitta family that owns the UFC), I'm also convinced the UFC's parent company will attack this with a relentless army of specialized attorneys. They won't be the ones who charge $500 an hour that Gaffigan mentions above. Some of them will charge  much more than that for a phone call or a short consultation. The Fertitta-owned Station Casinos chain paid some of their bankruptcy lawyers as much as $900 per hour or more to carry that case through the court process.

These firms backing these fighters will have to be ready for all out war, and in many ways it was a crafty and cunning move to publicize this effort before it even became an official legal action. It also makes sense to duplicate the proceedings on the off chance that the cases end up before two, three, or even dozens of different judges as multiple stand-alone litigation streams instead of being consolidated at some point. Legal battles often hinge on the paperwork, and well-heeled firms aren't afraid to kill a few trees to overwhelm their opponents with copious amounts of reading material. Responses to everything in all cases would also have to be filed, each of those detailed legal documents requiring different content and unique defenses. It's actually more like what Zuffa does when pursuing their own worst enemies in the courts. They are used to being the big bully who always gets what he wants. This time, they might be facing an army of Davids against one Goliath.

Unfortunately, much of the mainstream combat sports media wants to remain in the UFC's good graces and will not publish a crooked word about the company. Most of the "news" sites that support the UFC no matter what will dismiss these legal proceedings as worthless and hopeless. That's really too bad, since the UFC's objectionable and corrupt business practices are laid bare in these legal documents. If you really count yourself as a fan or supporter of this promotion you should read this whole case despite the difficulty of the language and the dozens of pages involved. To access the full case document from the opening action, click here.

Trying as hard as I can to look at this case objectively, I do have some important questions to raise.

The first question is where are the financial figures coming from in these documents? There are claims like, "On information and belief, UFC Fighters are paid approximately 10-17% of total UFC revenues generated from bouts." Yet, there is no exhibit or affidavit this statement points to for proof. This is not to say I do not believe this could be possible. I just want to see where these financial estimations are coming from.

The second major question is why are these lawyers only pursuing this action on behalf of such a narrow group of the larger spectrum of victims that their described monopsony/monopoly scheme impacts?  The reality of conditions exposed in these documents cries out for other promotions, individual promoters, managers, agents, burned sponsors, trainers and other supporting staff to be included as plaintiffs. Perhaps I should just wait and see on this front. These firms filed three detailed lawsuits in a single week, so by next month there could be dozens. Like Gremlins, these furry little legal creatures could multiply and turn into monsters.

Finally, what is the average fighter's costs for a year of full time training? There ought to be a reflection of this somewhere in this suit. I would love to see a poll of UFC fighters asking this question. Also, what is the average yearly income of a mid-level UFC fighter, and what percentage does he or she keep after taxes and expenses? Some of this information could come out of the discovery process if the case goes that far. A Median Income Level would be an excellent baseline for these attorneys to show that the fighters were not getting their just due out of this raw deal they had to make with the UFC in order to compete at the "elite" level of the sport.

I am certain there are still fighters out there who literally wind up in the negative after each fight with their purses and bonuses going directly to paying off expenses. Travel and lodging, passports, training staff, management, medicals, and the countless other costs associated with a typical training camp can bring a fighter from $60,000 to zero in a heartbeat. I think this is the harshest reality that will be exposed in these litigation streams. Yes, the UFC has medical insurance, but fighters bear the costs of medical testing required for every fight. To get to the level where you are attracting huge show, win and bonus purses, you need to treat mixed martial arts training like a full time job. Fighters don't just drop out of the womb as seasoned experts at every discipline. It takes dedication, heart, patience, and in many cases copious amounts of money to get you and your entourage to the promised land. Sponsors can only chip in so much after they pay the UFC just for the privilege to be associated with you. Purses can dissolve before the fighter sees a penny.  

This case tackles a plethora of actions the UFC took to lock down the MMA marketplace as the dominant, controlling force. The Federal Trade Commission investigated many of the same circumstances and found no evidence that would lead to any formal action. The fact that the FTC was even looking into the fight promotion at all was headline news, but their lack of action made the UFC look as if it was vindicated of all monopoly and monospony claims. The reality is there are just too many obstacles to a government entity bringing such an action against such well-funded and well-positioned opponents. These agencies have to deal with red tape, politics, and influence peddling on top of trying to build a rock solid case while fighting against highly skilled corporate attorneys. It doesn't help that the Abu Dhabi government is in bed with the promotion by way of their 10 percent ownership of the UFC through Flash Entertainment. Talk about an unbreakable piggy bank!

The Fertittas are notorious wheel greasers, and they promote and support powerful politicians like Harry Reid with frequent donations and endorsements that Reid repays when he can. They are also traditionally very supportive of the Republican Party. Just because all their direct Mafia ties are long gone does not mean they forgot the art of maintaining "connected" status. This is why the FTC's refusal to bring charges does not really mean there was nothing concrete behind their concerns. The Fertittas are also responsible for a large chunk of taxes paid in the state of Nevada and California, and wherever else they do business across the country. Being an average Joe taxpayer isn't going to get you out of many major jams, but things change when you pay the kind of epic tax bills the Fertittas foot every year.

At the same time, a civil law firm does not have the same constraints to worry about. They're not playing with taxpayer money. They listen to their clients, not constituents or powerful politicians. They don't have to fear a backlash. Still, the court system can also be influenced through political channels. It's an uphill battle either way. So, even when there's plenty of smoke, there's no guarantee any of it will catch fire unless conditions are absolutely perfect. This may just be that time when the blaze finally erupts, but I would be more inclined to expect a quiet settlement once the first flicker of flame becomes visible here.

Reading this suit reminded me of so many cases of fighter favoritism, payment complaints, and the UFC's many moves made to squash the competition. I am reminded first of the IFL's demise and their longtime feud with the UFC. The creators of the IFL allegedly took the UFC's proprietary information when they left the company's employ to start their new team-based fight league. The resulting lawsuit revealed that Dana White personally threatened company employees at the time with termination if they did not all immediately sign a formal non-compete agreement.

I also served as an informal consultant to one of the lawyers handling the PRIDE suit against the UFC after promises to keep the top-tier MMA promotion viable were quickly broken. The money to purchase PRIDE actually came from something called a "senior secured credit facility" that is due next year. This complex loan and credit package totaled around $400 million, and even Billionaire Mark Cuban invested in the debt. This is ironic, especially since I actually received correspondence from Cuban during the time when he was battling the UFC in court to retain the services of Randy Couture in his own fledgling fight league (HDNet Fights) that never quite got off the ground. Cuban was trying to put together a Couture vs. Emelianenko fight, but the bout fans were screaming for would never happen due to the whole ugly legal debacle. 

Cuban told me in a personal email that he was keeping an eye on my case against the Fertittas, and it came as a bit of a shock. A true financial genius, he eventually figured out how to make money off the UFC with or without Randy on his payroll. I later questioned Cuban on the Fertittas owning Xyience, which at the same time was sponsoring the UFC. Cuban wrote back and explained that there is nothing inherently wrong with them doing that from a business ethics standpoint and the arrangement was perfectly above board. Still, I thought it was strange that the Fertittas seemed to go out of their way to obscure their ownership of their own sponsor.

The recent class action lawsuit takes time to further explain Couture's issues with the UFC, including his refusal to sign over his lifetime rights. At the time Couture took a stand against his former bosses, it was a move that was unheard of. Most fighters knew if they wanted to get anywhere in the industry, they had to maintain a friendly relationship with the UFC bosses and toe the company line. Couture was one of the promotion's success stories and could claim a healthy fan base and a huge part of the UFC's history. He didn't want to short change his legacy and struggled with the UFC over their demand for lifetime rights and other concessions. The feud would grow to be a bitter one. It's actually still simmering quietly in the wake of Couture being excluded from even being able to corner his own son when Ryan Couture was a UFC fighter for a brief stint.

I interviewed Ryan Couture personally in Las Vegas a few years ago, and he told me off camera that his father encouraged him to join Strikeforce because, "The UFC likes to keep you under their thumb." The UFC's buyout of Strikeforce eventually led to Ryan having to take the best offer that came along, which happened to be the UFC's. Losses to Ross Pearson and Al Iaquinta were enough to force the organization to part ways with Ryan, and he now fights for Bellator.

So, I have intimate knowledge of how this climate of dominance developed and how fighters have been conditioned to think that you can't fight the UFC, even if you have a legitimate beef. UFC fighters are taught from their earliest involvement with the company that you're better off being blindly loyal, staying perpetually quiet about any grievances you might harbor. Typically, fighters who do speak out are those who are above reprisal (i.e. Jose Aldo or Jon Jones) or obscure enough to dismiss as disgruntled nuts (i.e. Jacob Volkmann and John Cholish). The bulk of the UFC masses want to remain employed and on the rise, hoping for brighter days and bigger paychecks. Criticizing the company leadership is a great way to earn a demotion or guarantee that you'll never get a fight bonus again.

The case also highlights Quinton "Rampage" Jackson's past run-ins with the promotion he just recently re-joined after referring to his old bosses as "the devil you know" in a Twitter post. The complaint, which Jackson is not a party to but could still actually benefit from, describes how Jackson secured individual deals with a figurine company called Round 5 and sneaker giant Reebok before the UFC moved in and blocked these moves in favor of arranging their own longtime agreements with these companies.

Jackson and Tito Ortiz both departed the UFC for Bellator amid very public disputes regarding how their careers progressed under their UFC contracts. They both once had plenty to say about how much they were mistreated, but now they are singing what sounds like the same tune and avoiding run ins with this all-powerful force in the industry. Business is business, explains Jackson. Ortiz officially turned down the opportunity to join this round of lawsuits, citing his ongoing responsibilities as a manager and agent for fighters. In other words, he doesn't want to burn down the bridge he just began to rebuild after burning down the first one.

The basic gist behind Ortiz's motivation for opting out of the court battle is actually explained on page 47-48 of the initial complaint by Le, Quarry and Fitch:

 "Professional MMA Fighters who compete at the highest level of the sport cannot 'opt out' of UFC because the UFC’s anticompetitive conduct has made it impossible to maintain a successful MMA fighting career outside of the UFC."

So, if that statement is indeed correct, it's highly likely that Ortiz will bite his tongue and wind up following Jackson back to the UFC in the near future. Still, where some fighters are convinced the UFC will have their backs in the long run, others are buoyed by the suit and want in. One such fighter is Sean Sherk, who retired with a 36-4-1 record that included a long stint in the UFC. Like many fighters who are no longer in the inner circle of the company as fighting superstars or honorary executives, Sherk can't help but look back and feel cheated. What he put in seems to be exponentially greater than what he was able to reap in return as far as purses, profits and residual income. Sherk is the first fighter I've heard of supporting this case who actually owned a UFC belt at one time, so if he gets formally involved it will certainly be monumental.

Though many experts might think most current UFC fighters will refuse to sign up as plaintiffs for fear of reprisals or retaliation, it might also be hard for some to explain why they signed a petition that was reportedly circulated to UFC fighters in 2012 (as described by Pablo Garza). The petition reportedly asked fighters to confirm the promotion was not a monopoly and that all its fighters were treated fairly. The signatories of this petition might be used against the plaintiffs in these class action cases as proof that the UFC is running a reputable and upstanding operation with no hint of monopoly involved.
   
The reality is, there really are "company" fighters who get all the breaks while their lesser or equal counterparts continue to get the short end of the stick. This group of pampered active and retired insiders includes Chuck Liddell, Dominic Cruz, Gilbert Melendez, Daniel Cormier, Brian Stann, Dan Hardy and Kenny Florian (among others). Other than Liddell, they all have lucrative television gigs. Liddell has commercials instead with Duralast and Bud Light. I have never personally heard any of these guys present an argument that the UFC is in any way corrupt, greedy, or worthy of any significant criticism. You often find the same level of intense blind loyalty with whoever gets picked as a coach for The Ultimate Fighter. The lone exception may be Jason "Mayhem" Miller, who was hired more for comic relief than being a yes man. Sticking to the old company line is obviously being rewarded for most of the fighters who bite their tongues when it comes to lashing out against the company's management.

Jon Jones and Ronda Rousey are stars who are really almost bigger than the promotion, but they still wind up being sponsored by who the company wants to highlight most. I suppose they are fighters who still get treated like they can do or say no wrong, but they still have to stand by the main causes the company champions. They are spokespeople by default, shilling whatever they have to in order to remain loyal to their bosses. Both Rousey and Jones were sponsored by Xyience when the Fertittas owned it. Ronda is also the "prettiest" face involved in the UFC's frequently-airing commercials for a major cell phone network. Cain Velasquez is also featured in the same commercials. Jon Jones is also the first MMA athlete to sign on with DraftKings.Com as they assemble their very first Fantasy MMA offerings in time for his upcoming bout with Daniel Cormier.

The only hint of any major animosity shown toward the promotion by any of the above-named "company" fighters in my recollection was when Brian Stann retired and cited concerns regarding PED usage in the sport, the same sentiment Longtime UFC Welterweight Champion George St. Pierre pointed to as the main reason for his departure from the sport.

Stann also recently made a telling remark during last Saturday's UFC broadcast. During one fight that didn't live up to expectations, Stann stated that as a fighter, "You have to take risks if you want to make a name for yourself in the UFC." If anyone should know, it's Stann.

If you end up washed up or not making enough money, so many fans and UFC supporters (often called nuthuggers on MMA forums) will condemn you for not trying hard enough. It's your fault, no matter what, even if you spent half your own life savings trying to make it in the sport. Yet, the UFC is not a powerhouse because it has only successful and dynamic fighters. It takes some fighters who are not so dynamic and amazing to actually show how good the best fighters really are. Having these lower-tier fighters on board is essential, but their lack of extraordinary talent also makes it easier for the UFC brass to abuse these folks. The very design of the bonus system and the fighter pay structure encourages fighters to take risks in every fight in order to achieve success in the UFC. You can't just win by split decision on a smart, boring strategy and expect to get all the spoils of fame and fortune that fighters who always win by knockout get. It's no longer a case of winning being enough. You also have to put on a show to get anywhere in this organization. 

Even though he's not a perfect poster child for fighters who did everything right and still got shafted, Cody McKenzie's recent retirement is worth noting here. He recently expressed some major issues he had with working for the UFC and trying to survive on the outer fringes of the sport and failing. Though it would be easy to argue Cody and other complainers like the Diaz brothers just don't work hard enough, you could also make the claim that they were maybe convinced at some point along the line that working harder just wouldn't matter. Some people just either don't have that natural talent or simply have no chance of getting to the elite level of the sport. The cards really are stacked against some fighters, even though some of them possess all the talent in the world.

Whatever the reason a particular contender has for lacking supreme ass-kicking ability, being a halfway decent fighter also takes a tremendous amount of work and sacrifice in this sport. The effort put in by these less than superior combatants in the UFC is just as tremendous at times as those fighters who hold championship belts. Yet, the same effort rarely earns the same return under the UFC umbrella. It's all about popularity, positioning and performance in the UFC. You can't just work hard. You also have to suck up to the brass, align yourself with the right people, and just be a good soldier in general. Even if you get booted from the UFC at some stage of your career, you still have to keep quiet about your bad experiences if you ever want to make it back into the fold.

The UFC taught Cody McKenzie a hard life lesson. They basically told him to "go fish," which is actually a career the Alaskan native would have  been better off pursuing. After all, everything on the boat is paid for. There's no on-the-job travel expenses, trainer and management fees, or dependence on extra bonus money for superior performance. You show up, you work hard, you get paid, and you go home if you don't wind up in the hospital or on the bottom of the ocean due to some kind of tragic accident.

The Ultimate Fighting Championship has a serious problem with the way they treat fighters, plain and simple. Does this lawsuit do enough to put a stop to it? I doubt it, personally. I envision this whole situation fading away quietly with each fighter getting a few million and the lawyers getting all their fees paid. All it will take is one or two bigger names coming out in support of or actually joining one of these classes of plaintiffs. There will be a point when the bad publicity and mounting sense of revolution will become too much for the UFC brass to bear, and they will pay a settlement. Nothing will actually change for the better in the long run if that happens.

For sweeping change to come out of any of this litigation, it will have to go to trial. People will have to testify, damning documents will have to be exposed in discovery, and fighters will have to tell the sordid details of their awful personal experiences with this all-powerful promoter for the record. No matter how dedicated the plaintiffs and their attorneys are, I doubt California's political climate and the possible favoritism of the Fertittas due to their casino and property interests in the state will allow this case to get to trial.

So, it makes for a good story and promotes healthy debate on the monopoly subject, but if any changes do eventually come out of this court battle, it will take years for them to take effect. The worst case scenario would be a climate where the lawsuit is actually killed before it gets off the ground, which is entirely possible if the UFC has that much behind-the-scenes influence in California.  

Nevertheless, this is a fantastic start in the quest to bring this organization to task for the way their overbearing actions negatively impact the sport of MMA as a whole. It is one thing to build something great while focusing only on your own business model and building it up from the initial concept into a worldwide force to be reckoned with. It is something else entirely to focus on destroying and/or minimizing everyone else in your niche to get to the top. Honesty is hardly ever the best policy in our capitalist way of doing business, though. Sometimes keeping secrets is actually crucial to a company's survival.

Consider the case of a guy named Ken Pavia who used to be a big player in the MMA industry and is now a bit more removed from the sport. Pavia shared some UFC contracts with Bellator and wound up on the business end of a Zuffa lawsuit against him. The debacle eventually led to Pavia leaving the country to work for an overseas fight promotion. Pavia told me during this period that Dana White personally threatened him over the situation, telling him that the company would do everything in its power to get revenge. He even claimed White told him he would not be happy until Pavia's fiance left him and he committed suicide. A countersuit filed on behalf of Bellator and Pavia helped initiate a settlement in the case that is not allowed to be discussed by either party. So, now the outcome of a case about company secrets is itself a company secret.

The point is, the UFC is constantly building up their power base, and they have tremendous pull when it comes to making or breaking a fighter under their employ. They can also make life difficult for anyone who may rely on their support to do business in the industry.

Often the courtroom can be the last place to look for any semblance of real justice, but the tide has to turn somewhere. Maybe it will turn here, but my outlook on the situation is colored by skepticism and personal experience with the type of lawyers the Fertittas hire and how they operate. I'm more inclined to think more publication and less legalese would be a better way to inspire change. A blockbuster documentary exposing fighter complaints, maybe with a few blurred faces and distorted voices, might go a lot further in blowing the lid off this corruption.

Unfortunately, there's also a chance that this behemoth is just too big already and nothing will be able to keep it in line. As these class action cases outline, the UFC has been at this monopoly building thing for a long time, and they're very adept at avoiding culpability for their worst transgressions. Still, all it will take is one honest judge in California who is willing to hear the case out and let it continue to a final conclusion. And it would certainly help to have a few more high caliber fighters coming out of the woodwork to join the cause and levy their own personalized complaints and grievances.

I have been harping on the possibility of a legal action like this against the UFC for a long time, ever since Dana White started saying he wanted the UFC to be as popular and powerful as the NFL someday. I predicted years ago that a class action lawsuit could be the only way to stop the rampant abuse many fighters under UFC contract face in trying to earn a respectable and comfortable living. Even the highest paid UFC athletes no doubt make a huge chunk of their income from sponsors and endorsements. The most famous fighters also get movie roles on top of all that, so there's not much to complain about. Yet, what does it say about the sport and the owners of the biggest promotion in the sport when even their top athletes aren't making a luxurious living off the actual wages they're paid? Why should they need to depend on all this outside income when the profits of the promotion make it possible for them to be compensated much better without all that hoopla?

The answer to those questions may be more simple than you think. It all amounts to one short word, just five letters long: GREED. And the UFC brass is so downright greedy that I can't imagine them spending more on a settlement than they would be willing to shell out on the army of legal bulldogs it will take for them to crush their opposition here. When you are as corrupt and conniving as the Fertittas and Dana White, lawyers can be the most important piece of the puzzle. Some of the sleaziest attorneys are just as likely to advise you on how to break the law through sophisticated maneuvering as they are to help you make sure to follow it to the letter. The kind of lawyers employed by these folks are the ones all the lawyer jokes are really made for. Many of them already sold their souls to the highest bidder, and they have no scruples or morals remaining to stop them from taking these valid fighter complaints and turning them into a puff of smoke.

I, for one, will be rooting for the fighters to score a key victory here that finally exposes the UFC for taking advantage of the very people who made the organization what it is today. The publication of the suit itself goes a long way in doing just that, but results are what will really matter in this case. This legal team has the personnel and the persistence to make things interesting, but what they really need is to secure a final judgment or at the very least get to trial.

Stay tuned as we follow this case to see if any of this legal wrangling will pan out for the plaintiffs in the long run. I know one of the folks behind this case is interested in starting a fighters union at some point, so even if the case settles it might lead to some financing for that future endeavor. This development might not represent a perfect plan to revolutionize the way the UFC does business, but it's a damn good start as far as attempting to root out some of the corruption and mistreatment some of the promotion's fighters endure. I will keep a sharp eye on these cases as they play out and pass on new documents and developments as I acquire them.

Sunday, July 11, 2010

Putting the Xyience Story To Bed & Waiting For The Ultimate Judgment Day

By: Rich Bergeron

00fre-speecheppleyandcoIt is so hard to even imagine the day when the Xyience sage will really be over for me. Back when all this began I had a feeling it might be the kind of story that could define my career someday. It’s been nearly two-and-a-half years since the lawsuit paperwork reached my inbox. The court battles have been contentious and frustrating for the most part, but certain points were strangely fun.

I enjoyed more than anything the opportunity to call out the opposing lawyers along the way who always tried to back me into a corner with technicalities. None of them bothered to gather any substance or concrete evidence. They attacked me with lies upon lies, a foundation of falsehoods for a case that never had merit on their part. They defended their own subversive and manipulative behavior to hide the truth and decried my methods of revealing it.

For me, rather than reflecting negatively on all the days I’ve had to spend crafting motions and doing legal research or trying to calculate the total wasted hours, I look at my accomplishments by the numbers:

I’ve managed to keep this case moving through the system through 3 different judges before Bankruptcy Judge Mike Nakagawa took the matter over.

Judge Timothy Williams, the gentleman endorsed by Station Casinos for his campaign for the bench, was the first obstacle. Judge Williams signed the existing, un-enforced bogus injunction secured by the first lawyer on the case: Jamie Cogburn. By the time I appeared to argue against the application of a default judgment, Williams had warmed up to me a bit for at least trying to be a lawyer with all my might.

Click Here to read the throwback report on that first success before Williams that I argued a bit too hard for (recording included) but got anyway.

Williams eventually stepped down due to some coincidental connection to one of the law firms involved once Jamie Cogburn quit the case with an outstanding bill. The case spent a brief period under the guidance of two other Clark County, Nevada judges before being transferred to bankruptcy court and Nakagawa.

Four law firms couldn’t shut me down through the worst of conditions with all the odds against me.

Cogburn’s took a crack at the case and failed first. He famously offered to settle with me for “a box of sodas” and “a thousand dollars” when he was the one who first filed the case against me. It was yet another small victory knowing Xyience left him a huge unpaid balance.

Then Pamela Lawson of Hunterton and Associates took on Xyience as a client without even knowing how to pronounce the company’s name. She was easy to make fun of, and not just for me.

Fennemore Craig’s legal team of Laurel Davis and Jon Pearson never really lifted a finger to further their case, playing the defensive role through their whole involvement. Most of their hard work was done by the Fertitta Enterprises team fighting my counterclaim as a co-defendant of Xyience’s. The Fertittas had Gordon and Silver’s Greg Garman and Matthew Zirzow doing their dirty work, and these attorneys took some of my worst verbal barbs in writing and in spoken word at the bankruptcy hearings. I called Garman a clown twisting balloon animals for the court and hoping to amuse the judge at one hearing. I called his clients at Fertitta Enterprises thugs in business suits and corporate crooks.

The fifth firm is the liquidation trustee, and there no longer appears to be a need to fight these first legal minds outside of Nevada to handle the estate’s litigation streams. These folks are finally on my side and ready to put this long story in the proper perspective by concentrating all our combined legal efforts on the main culprits. They are already pursuing some of the same bad apples I’m after.

I’ve handled these legal matters in both local and federal court systems, all the while living thousands of miles from the venue. I’ve been flown to New York by my adversaries and to Las Vegas by some Xyience shareholders. I’ve been offered as much as $5,000 to walk away. I’ve spent about that much through the course of the litigation on associated costs, but never for any paid legal advice.

I even wound up taking on a fifth judge (judgegod.com) and a sixth law firm (www.lewis-kappessucks.com) in Indianapolis due to an unrelated book project involving a plastic surgeon’s most outspoken online critic. I started www.suckssite.com as a resource to all those Americans out there in need of an effective outlet to gripe about the things that irk them the most.

I’m hoping the days ahead might afford me the opportunity to stop being a lawyer and start being a writer again. More than the prospect of spending any settlement money on my formal law school training, what really intrigues me is using the funds to travel to appropriate research points for an all-inclusive book project.

The Ultimate Judgment will eventually come down against the Fertitta Enterprises crew and all the other individuals and entities involved in bankrupting and using Xyience to further their own needs. I’ll be involved with the trustee’s office every step of the way, but in a limited role so I’ll have time to write the story. A few more reports here will take us to the end of this whole saga’s Online life. From there the Xyience tale will grow to new heights as the only written expose to fully reveal the Fertittas for the true scumbags they are.

Stay tuned in the coming days as a new report is coming soon about some other "Usual Suspects" who moved onto other scams after bilking Xyience. I'll explore one of the trustee's other complaints and the defendants in that claim.

Xyience, Inc. Liquidation Trustee Files Complaint Against Fertitta Enterprises And Former Company Executives

Latest Xyience Case Update

By: Rich Bergeron

The Usual Suspects, including all the characters pictured below and Fertitta Enterprises GM William Bullard, are implicated in a new civil suit. The case, filed by the Xyience Bankruptcy Liquidation Trustee David Herzog Tuesday, is finally unearthing the scandal I've been reporting on here on this site for more than two years now. The complaint is very thorough, but I've created a CONDENSED VERSION HERE.



The characters and circumstances involved are nothing new to me, but the vindication of my own complaints is new. This is the official legal representative of Xyience finally picking up the story line I've been laying down for over two and a half years now. The judge in my own case will no doubt be more willing now to admit my case is substantially sound and worthy of a second examination. Read the complaint for yourself and take the time to look back at all my reports here, and you'll see they name all the individuals I've been complaining about on this site for years. Here is the full version of the complaint:


Xyience Liquidation Trustee Complaint -

THE LATEST XYIENCE LAWSUIT & OTHER XYIENCE DEVELOPMENTS

By: Rich Bergeron

Tonight, I found out the true meaning of "no good deed goes unpunished." After years of fighting to expose the truth behind the Xyience scandal I am now the last person in the bankruptcy process still fighting to get relief for burned shareholders. I try to send updates from time to time to all those with some connection to Xyience through past stock ownership and/or other affiliations. Every now and then someone asks to be removed from the list. Some people would just rather forget. Then there was tonight's message from a woman named Diane Frank:


from DIANE FRANK TEAM
to Rich Bergeron
date Thu, Jun 18, 2009 at 1:59 AM
subject Re: XYIENCE JUST GOT SUED AGAIN!
mailed-by yahoo.com
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Rich
I dont give a fuck! I am a single mother with 4 children and you/YES you personally ruined Xyience. You and I both know the true facts. Please do not send me your ____ again.

Diane Frank

THE DIANE FRANK TEAM
Diane Frank (951) 727-0149
Office (951) 727-0200
Fax (951) 727-0232


It's nice to know you have the support of the people you are fighting for. I hope this is just misplaced anger or a misunderstanding, but it's hard to tell. Unfortunately nobody believes it when you try to help for no reason at all. It's just not the norm, and that's a shame.

At any rate, the reason I really wanted to write this article is to highlight how Xyience is being sued again.

R&R International, INC. Just filed action against Xyience in Florida on April 13, 2009 over a distribution agreement gone sour. The agreement, according to the complaint, contained the following clause: "Xyience hereby grants the exclusive right to distribute and sell the Xyience Energy Drink brand product lines to Accounts in the state of Florida except for the area listed below and the exclusive license to use the Trademarks solely in connection therewith, in each case subject to the remaining provisions of this agreement. All additional distribution opportunities outside of the above mentioned territories will have to be approved by Xyience."

Enter JP Beverage Distributors, requesting a significant order of Xyience product, the complaint explains. Under the first cause of action for breach of contract, R&R claims JP Beverage wound up buying the product shipment directly from Xyience after R&R already purchased everything to fill the same order from Xyience. Instead of cooperating with the agreement, it appears Xyience either intentionally or unintentionally breached it if the complaint's allegations are true. In true scamster style, this situation would have resulted in Xyience getting paid twice for the same order. What's worse is that the complaint also alleges Xyience stiffed R&R on an $8 commission for each case of Xenergy sold. Rather than confront the mess with integrity and professionalism, it seems the good folks at Xyience allegedly played hardball. The lawsuit paperwork also lays out how Xyience reportedly refused to duly credit R&R and then suddenly demanded payment on all outstanding invoices. This appears to be designed to back out of the contract the easy way if R&R could not pay and the contract were to go into default.

The complaint also adds a second breach of contract cause of action. This second claim details how Xyience's billing and invoicing was not up to snuff and goes into further detail about other failures of Xyience to meet their responsibilities as outlined in the distribution agreement. For a company trying to make major inroads with distributors this could be a red flag proving the company is not really in good hands as its newly crowned CEO will try to tell folks even while the same old stuff keeps happening behind the scenes.

This site, claiming to be the home page for R&R, still proudly boasts of the Xyience agreement with the company. While the lawsuit does not specify exactly how much damage R&R sustained financially as a result of the alleged Xyience breaches, the complaint request in excess of $75,000 in damages, attorney fees and court costs, and a jury trial.

The case is rife with evidence, which includes paperwork initialed MCC (Manchester Consolidated Corporation I'm guessing) where Xyience is supposed to initial. Manchester, which has at least two core former-Cott executives on staff (Cott makes Xenergy) bought Xyience last year out of bankruptcy for $15 million. Today, a company called Manzen is the official DBA (doing business as) of Xyience, indicating Zyen, LLC (A Fertitta Enterprises Company) is still playing an integral role in company management. It appears the purchase was a "rent to own" type agreement and not an outright cash for assets deal.

The next hearing in my own Xyience case comes on July 1, 2009 and will be in regards to sanctions Fertitta Enterprises attorneys have asked the judge to levy against me. This should be an interesting episode of the Xyience saga to say the least. Go to www.xyiencesucks.com to learn more.

Looking FOR LEVERAGE: Fertittas' Station Casinos Empire Running Out of Time

By: Rich Bergeron

The Fertitta Family is in crisis mode to save Station Casinos from the throes of bankruptcy, and without a solution materializing by Thursday there could be some major trouble brewing for the multi-billion dollar gaming empire.

While the Fertittas are not the only ones who find themselves stuck in the stagnant economy and obliterated by Las Vegas' worst-in-the-nation housing crisis, they are one of the most heavily leveraged casino operators and land-owners in an industry that depends on both locals and tourists alike being able to pay to play.

The Las Vegas Sun got the jump on the situation yesterday by printing a piece about commonly situated Harrah's and Station's different approaches to getting out from under their massive private debt. Sun Reporter Liz Benston described the troubling outlook in no uncertain terms:

"Analysts say Station will likely default on the company’s bank loans by year’s end because it has too much debt relative to cash flow. That could allow the bank to demand repayment, triggering a filing for bankruptcy protection."

The company's new deadline for a debt exchange Hail Mary has been set. They have until 5PM on December 11 to consider all the options on the table. Assets could potentially be sold, and reports have surfaced indicating the Fertitta Family is willing to put their own money to the cause, but they certainly won't be getting any sweetheart deals out of this scenario.

One thing's for sure, Uncle Sam will not be bailing out any casinos.

The Fertittas live in the lap of luxury, and it's not out of the realm of possibility to maintain that lifestyle even despite a potentially ugly bankruptcy of Station Casinos. Right now Frank Fertitta, Jr ranks at #20 on the list of the top 100 property tax payers in the Spring Valley CDP district of Vegas.

Frank's next-door neighbor is none other than former Aladdin Casino owner Jack Sommer, so he has someone one door down who could give him all the casino-related bankruptcy advice he needs should Station Casinos decide to go that route.

Frank Junior's sons live in mansions, too. Lorenzo's got a multi-million dollar house on Greensboro Lane, and brother Frank Fertitta III has the kind of obnoxiously huge spread that is best classified as a complex. Here's a great shot of the manse:









Vegas has been very, very good to the Fertitta family so far, but this economic crunch time comes at the worst possible moment. They are stuck at the apex of their aggressive development and massive expansion of the Station Casinos suburban hot-spot model. The company's strategy of developing huge resort-style casino communities in the suburban areas of Vegas backfired amidst the massive wave of foreclosures in those very same areas.

A town that has seen its fair share of casino implosions is undergoing a major makeover of the strip, evidenced by the recent completion of what is sure to become the next big Vegas spectacle: A GIANT VOLCANO AT THE MIRAGE THAT COST $25 MILLION JUST TO CONSTRUCT. Cranes and crowds of construction workers populate the strip now, fast at work creating a new lavish landscape for tourists to be amazed by.

And for those who didn't want to be spectacles themselves there would always be the off-strip offerings of Station Casinos like the new Red Rock facility and the still unique and secluded Green Valley Ranch--each promising pampering, privacy, and perfect ambiance. Yet, no longer are so many bigwig executives throughout the busted economy able to blow so much money without batting an eye. The out of the way premium stops are being skipped over for the conglomerated and concentrated on-strip locations. Facilities like Red Rock may be obsolete before they even get off and running, but there's no doubt a whole new level of luxury available there:



Green Valley Ranch looks like the kind of fantasy land that makes you forget you're there for the casino in the first place:



By the time the Fertittas cornered the suburban market, the market had suddenly disappeared. Yet, Station Casinos has faced difficulty before, and they'll hang on tight here and do what it takes to weather the rough patch. Industry suggestions that the company will be bankrupt by the end of the year may be premature, but not impossible at this point. If the Fertittas have mastered one thing in the business it is how to make their customers feel welcome. They represent the image of cut and polished business masterminds, yet they maxed out the company's available debt limit with massive senior secured credit facilities based on a gamble that didn't account for any downturns or deep recessions. You almost have to ask at this point if this is another Kansas City Shuffle going on behind closed doors. The way you get maximum leverage is to always be building.

As the folks who jacked up Boston's "Big-Dig" highway project know all too well, you can come up with some legendary billing proportions for construction on that kind of scale. I think the Dig's not even done yet. What is finished barely even solved the problem and went waaaaaaaaaaayyyyyyyyyyyyy over budget. Not to mention it literally had fatal flaws.

It's easy to lose track of small expenditures when you're dealing in hundreds of millions and every now and then even billions of dollars in contracts, land grabs, and expansion plans. If you cut corners you can free up more dough to play around with.

In organized crime terminology when it comes to casino operations, the off the top tariff called "the skim" has evolved drastically. There is a whole new atmosphere in town. There are corporate land barons and casino magnates running things now rather than Mafia capos. Yet, are we to imagine by any stretch that all the strawmen are truly gone from Vegas? Something tells me the Mob always finds a way to infiltrate from afar and will always have some kind of iron grip on Vegas. Being pushed further underground has only made the organization more tight knit and unwilling to give up any new secrets. They have to come up with more sophisticated schemes and more subtle ways to exert influence. But if they're still entrenched in town, they're hurting, too.

The Fertitta family aren't the only ones in Vegas feeling the pinch.



They're not even the only ones in the world suffering. Australia's gaming interests are reeling, too.



Tourists pinching pennies seem to be going for a look but don't touch approach, and it can't be good for the future of gaming. Boxing and Mixed Martial arts events promoted in Vegas may also suffer in the long run. Only time will tell.

The Fertittas financial issues are by no means limited to Vegas, either. California has been troublesome, too.



The Fertitta family's foray into being publicly traded doesn't seem to have turned out as the Fertittas had planned, and the private buyback last year seems to have over-burdened the brand with hard to shed debt instruments. The Fertittas are reciting a new rendition of the old Robert Frost poem this winter in Vegas:

These times are ugly, dark and deep,
But we have promises to keep,
And billions to pay before we sleep,
And billions to pay before we sleep.

Like the lawyers who promote needless delay in the bankruptcy case, the Fertittas seem to be putting off the inevitable, scrambling to figure out a deal. Lately they've been pushing back deadlines as the local Vegas tourism numbers begin to look weaker and weaker:

Station Casinos extends bond offer deadline again




LAS VEGAS TOURISM: Visitor tally continues to slide





UNLV economist says unemployment eventually may hit 10 percent locally




It should be no surprise that nobody in Vegas saw this coming or bothered to try and stop the corruption at the heart of this whole series of reports, spanning more than two years of my life now. After all, we're talking about a town spending $50 Million on a Mafia Museum project bolstered by its main backer: ex-mob-lawyer-turned-Mayor Oscar Goodman. Regardless of who is looked upon as the lesser of two evils, be it the Corporate Conglomerate or the Criminal Enterprise both now sharing Space in the new age Vegas, the common people always lose in the long run when greed takes over.

OTHER LINKS OF INTEREST:

STATION CASINOS FIGHTING OFF BANKRUPTCY



History of Las Vegas



JACK SOMMER'S GOOD FORTUNE



Aladdin Property History

TRAVIS LUTTER WANTS HIS XYIENCE MONEY!!

By: Rich Bergeron

Recently dissed and dismissed UFC Fighter Travis Lutter is reportedly looking for the sponsorship money Xyience stiffed him out of, $36,000 of it to be exact. Apparently he's e-mailed Dana White about the situation, and CAGEPOTATO.COM wrote a whole report about Lutter's payment request.

Lutter, listed as a creditor in the Xyience Bankruptcy case along with several other unpaid UFC fighters, is really the first person since Drew Fickett and Sean Sherk to come out in public and rail about not getting paid by the supplement company. Most fighters have simply taken it on the chin or just decided to take their chances in court and not risk pissing Dana off. Some have simply just admitted they haven't been paid and left it at that.

Perhaps the most ridiculous aspect of the whole unpaid fighter situation is that despite reports that all these Xyience-sponsored fighters haven't been paid, the XYIENCE FIGHTERS PAGE still lists them all as sponsored fighters. I've raised this issue multiple times in court paperwork, and nothing changes. I guess I shouldn't be surprised considering the amount of fraud they've been wrapped up in.

The fact that Lutter is seeking his money from Dana rather than Xyience itself is telling to say the least, especially considering all that stuff I'm getting sued for revolving around my reports of Dana's unholy alliance with Xyience. Keep your fingers crossed, Travis, and someday maybe your ship will come in. If you don't get the dough, I'm working on a way to get it for you by filing a Civil RICO Act case against all the main players and on behalf of all the creditors and shareholders who have been screwed, which includes a long list of fighters. Stay tuned for more on that fron