The Oklahoma City’s Bricktown Brawlers filed for Chapter 7 bankruptcy liquidation on July 27, 2011. The filing comes a month after former Brawler player Jason White sued the team for breach of contract.
The bankruptcy petition lists $55 in one bank account and 1 cent in another as assets with the team owing more than $300,000 to several investors, advertisers, and the IRS. The team listed its gross income for the 12 months prior to filing was $247,008.
White’s breach of contract suit alleges that he was never paid any of the money owed to him under his ownership agreement with the now-defunct team. His lawsuit states that he had a 10 percent ownership in the team. His agreement gave him 10 percent of all gross revenues from advertising and sponsorships. He said he was also guaranteed 10 percent of the team’s net profit.
White’s $10,000 claim is listed in the team’s bankruptcy paperwork, but is marked as being disputed. The bankruptcy filing puts White’s lawsuit on hold.
Creditors using lawsuits to wring money out of debtors is a low but legal tactic. The downside for the debtor is having no money for the debt and receiving a judgment that can result in a wage garnishment. Bankruptcy is an excellent legal tool for a debtor to use in response to a lawsuit. If a debt situation has reached the point of lawsuits, don’t lose any more money than you have to and file bankruptcy instead.
Benjamin Brand Services – Chicago bankruptcy attorney