Mark Cuban Files Federal Suit to Get Back His $5 Million Loan to the United Football League

Categories: Biz, Sports
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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. HDNet v. WILLIAM HAMBRECHT
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13 comments
Fredjack
Fredjack

I worked for this shitty league and they still owe me 2 months of pay from NOVEMBER AND DECEMBER!! $2500!!! They say they have no funding butttt in the meantime they are planning for the 2011 season, flying coaches to meetings etc... get a grip UFL and pay your employees. it has now been over a 100 days since I have been paid by this joke of a league. Other contractors and employees as well have not been paid yet. GROW UP UFL.

Tad Banyon
Tad Banyon

I'm confused. The story refers to Cuban making the $5MM loan but the suit is filed as if the loan was made by HDNet. If it were paid back tomorrow, who would put the money on their books, the man Mark Cuban or the company HDNet?

cleveridea
cleveridea

So...coming up with silly sports ideas is the way into Mark's wallet. (scribbles down furiously)

Tad Banyon
Tad Banyon

Cuban should have said in the suit that he thinks the reason he hasn't been paid back yet is because "he hate me".

Anyone?

No?

Eh, I wasn't too crazy about it, either.

TimCov
TimCov

Well, as long as he has his paperwork in order (there were signed agreements), Cuban is right to sue to get his money back. They agreed to pay the money back and didn't.

Rooster
Rooster

Translation: League is dead in the water and Cubes wants his wampum back.

Robert Wilonsky
Robert Wilonsky

Tad, look at the complaint. If they're sending the check to the HDNet address listed, it's going to Cuban's house.

Nick
Nick

Suit is between citizens of different states (diversity), Fed Ct. is the proper venue.

Robert Wilonsky
Robert Wilonsky

Until I came across the suit on PACER yesterday, I was unaware the UFL actually played a season in 2010. Hunh.

Robert Wilonsky
Robert Wilonsky

I was unaware, till I came across the suit on Pacer yesterday, that the UFL actually played a season last year.

Tad Banyon
Tad Banyon

Hmm well that doesnt leave me any less confused then

Rooster
Rooster

Yup. Gotta say going head-to-head with the NFL probably wasn't the smartest move. I wonder what made them think that was a good idea?

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