Mark Cuban Files Federal Suit to Get Back His $5 Million Loan to the United Football League
On April 23, ESPNDallas ran a piece in which Mark Cuban announced he'd become an investor in the start-up United Football League, co-founded by Bill Hambrecht -- the man who took Apple and Google, among others, public. Said the Dallas Mavericks' owner at the time, he didn't want to invest in a franchise, but thought putting money into the league was a good idea, especially with a potential NFL lock-out on the horizon: "Now if there's not a lockout, it's a valid league. But, that just made it more interesting."
Turns out, that investment was worth $5 million -- and, according to a lawsuit filed in Dallas federal court this week, it was a loan Cuban expected to be paid back by October of last year. Cuban confirmed as much last night via e-mail, when attempts to reach his attorney, Fish & Richardson's Tom Melsheimer, proved unsuccessful: "It was only a loan, and [it's] personally guaranteed by one of the founder's trust." Meaning Hambrecht, who's named in the suit, along with The Hambrecht 1980 Revocable Trust.
Says the suit, which follows in full on the other side, on April 7 of last year, UFL Management, LLC and Cuban's HDNet, which was in talks to broadcast some of the league's games, entered into a deal: Cuban would loan the league the $5 mil, with the understanding it would be paid back by October 6, along with interest at the rate of one percent per annum. But when the loan wasn't paid back by the deadline, they cut a new deal: The money would be returned by December 1, this time at the new interest rate of 15 percent per annum. But "on or about December 1, 2010, Plaintiff demanded that Defendants fulfill the terms of Defendants' guaranty, and pay the debt owed to Plaintiff in accordance with that guaranty, but no part of the debt has been paid." Hence the suit.
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