Tom Dundon, the billionaire owner of the National Hockey League’s Carolina Hurriances, is seeking to recoup his $70m investment in the now-defunct Alliance of American Football, it has emerged.
The Athletic has reported that in the league’s bankruptcy proceedings, Dundon has alleged that his investment took place due to “misrepresentations”.
Dundon – who this spring become the majority owner of the shuttered start-up league midway through its inaugural season before quickly shutting it down – says he was led to believe that it would cost $70m for the AAF to complete the campaign but the actual amount was $120m.
“Even though AAF executives told [Dundon Capital Partners] its contribution would get the AAF through the first season, those executives knew at the time of the execution of the Term Sheet that the AAF would likely need an additional $50,000,000 (including League revenue) on top of [Dundon Capital Partners’] investment of up to $70,000,000 to get through the first season,” according to the legal filing posted on Monday. “The AAF and its executives never disclosed this information to [Dundon Capital Partners].”
Dundon, an unsecured creditor of the league, also claims the AAF failed to inform him of “ongoing threatened litigation from a past associate who claimed to be a co-founder of the League and who was suing to obtain a 50 per cent interest in the AAF.”
According to ESPN, Dundon told a confidant after taking over the AAF that he “did zero due diligence. It was really stupid”.