We’re getting closer to the XFL auction and we should know if there is an owner and who they are August 7th. In the meantime, there is a second suit against the company due to the allegations that former CEO and Commissioner Oliver Luck was wrongly terminated from his position days before the XFL filed for bankruptcy.
Last we heard, this case was placed on hold until Alpha Entertainment had secured new owners via the bankruptcy action, as to not hurt the potential sale of the league. Today, we have some updates in the case between Luck and Alpha.
In recent filings Oliver Luck is asking the court to remove the stay against his case so he can continue to pursue approximately $23.8 million in compensation he feels is owed to him. As the trial stands now, Alpha Entertainment is required in the case with Luck to determine if he was wrongly terminated.
Mr. Luck was terminated without cause from his employment as the Commissioner and CEO of the XFL. The Employment Contract (as defined below) was guaranteed by Mr. McMahon. In the Guaranty Action, Mr. Luck seeks to enforce the Guaranty against Mr. McMahon. However, the District Court recently held that Alpha is a necessary party to determine whether Mr. Luck can recover under the Guaranty solely against Mr. McMahon, and has stayed the Guaranty Action until such time as Alpha can be joined.
Cause exists to lift the stay to allow Mr. Luck to name Alpha as a nominal defendant in the Guaranty Action because Alpha will be a party solely to determine whether Mr. Luck was properly terminated for cause under the Employment Contract for the sole purpose of allowing Mr. Luck to obtain a monetary judgment against Mr. McMahon under the Guaranty.
Basically, Luck is trying to pursue McMahon and McMahon only; and is arguing that this will not hurt the potential sale of Alpha Entertainment and the XFL. It goes on to say that if it is determined that Alpha did not properly terminate him for cause, Luck will not be seeking to recover any monetary judgement against Alpha and will not be pursing a claim in the case.
cont: Oliver Luck respectfully requests that this Court enter an order granting relief from the automatic stay… …to allow him to obtain a monetary judgment against only Mr. McMahon… pic.twitter.com/oBFr4N5gQ6
— XFL Newsroom (@XFLNewsroom) July 17, 2020
This is potentially good news for the new owners of the league. Anyone possibly looking to pull the trigger on the third revision of the XFL now knows that they shouldn’t need to be concerned with having to pay out Oliver Luck’s salary (roughly $23M) or go into litigation over it. The filings continue on to explain:
Courts in other jurisdictions generally grant relief from the automatic stay when the movant does not seek to recover from the debtor, but only seeks relief from the stay because the debtor is a necessary party in the movant’s claim against a third party. As these cases make clear, there is ample cause to grant relief from the automatic stay to allow Mr. Luck to join Alpha as a nominal defendant in the Guaranty Action for the sole purpose of obtaining a monetary judgment against Mr. McMahon.
As we stated above, we’re getting close to a potential XFL sale and from what we’ve heard and verified, there are a lot of interested parties in the league including companies in the media and sports industries. We’ll keep you posted as progress is made in the case between Luck and Alpha and of course the potential sale of the league.
