As first reported at TMZ, Allistair Overeem has sued his managers seeking "unspecified damages -- and he wants a court order to break his contract with the management team ASAP."
I have now had an opportunity to review the complaint.
Overeem is suing "Knockout Investments, B.V., Golden Glory, Golden Glory California, Bas Boon" and a bunch of "Does." According to the complaint, KOI is the legal entity that manages Overeem and allegedly KOI performs its management function through its affiliate, Golden Glory.
According to the allegations in the complaint, Overeem's contract with KOI and GG was signed in July 2007 and is for a 5-year term. The agreement has an automatic renewal provision (for another five-years) unless either party does not want to renew and then any such notice must be served six months before renewal.
The agreement provides that KOI and GG were to provide a number of services--Overeem alleges that some of these terms are ambiguous and unenforceable (e.g., "acting as a 'confidential agent,'" "looking for personal sponsors," and "making publicity") in a personal services contract.
Under the agreement, Overeem alleges that KOI and GG are entitled to 35% of Overeem's pre-tax income. Overeem alleges that under the contract the same 35% is due "for any deals 'within one year after this contract has expired and/or were prepared during the duration of this agreement.'" Overeem claims the management agreement also includes a provision that fines Overeem $10,000 for any breach of the agreement and a $5,000 per-day penalty for each day the violation continues.
Overeem asserts two claims--one for breach of contract seeking "an amount in excess of $151,000" and a judicial declaration concerning the parties' respective rights under the management contract. Essentially, he wants the court to declare that KOI and GG are not entitled to his UFC money. Overeem also seeks an accounting.
A few thoughts -- and I am doing this quickly. The liquidated damages clause -- i.e., the 10k penalty and 5k a day add on as the violation continues-- is not, in my view, by any stretch of the imagination enforceable. That said, there is no allegation that I saw that KOI or GG are seeking to enforce that provision. So it may be a moot point.
Turning to the crux of the complaint. Overeem lists a bunch of "failures" on the part of KOI and GG -- chiefly, failures to pay, including money from FEG, Dream/K-1s parent, but he really alleges nothing specific, e.g., an amount. He also claims he was not "properly informed" and alleges that KOI and GG failed to "protect [his] interests." Overeem also alleges that he believes KOI and GG received some undisclosed bonus arising from Overeem's signing with the UFC--nothing more.
While certainly some of the provisions in the agreement could have been written more eloquently, whatever services Golden Glory provided, it seems pretty clear based on my read of the complaint (which is biased for Overeem) it is entitled to 35% of his pre-tax income and it also seems pretty clear that they have a trailing commission for a year even after the contract has expired. Some of the allegations arguably make KOI and GG look bad, e.g., allegedly managing him in jurisdictions where KOI and GG were not licensed and allegedly pushing him to fight when injured. But not sure that gets him around the 35% or somehow renders the management contract a nullity.
In any event, I read this quickly but sounds like Golden Glory has a nice little claim for the UFC 141 income, which would presumably include sponsorship money as well.
All of this said, let's see how the story unfolds as there may be more out there.
Fight Lawyer
