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Schaffer Third Party Complaint and Counter Complaint

Schaffer Third Party Complaint and Counter Complaint

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Published by Darren Adam Heitner

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Published by: Darren Adam Heitner on May 19, 2012
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District Court, City and County of Denver, Colorado1437 Bannock StreetDenver, Colorado 80202(702) 865-8301
PETER J. SCHAFFER, an individual andJOHN RICKERT a/k/a JR RICKERT, anIndividual, AUTHENTIC ATHLETIX, LLC, A LimitedLiability Company.
Third Party Defendants
v. C. Lamont Smith Individual, Damien Moore and ALLPRO SPORTS AND ENTERTAINMENT, INC., aColorado corporation,Peter Schaffer400 South Steele Street, 47Denver, Colorado 80209FAX Number: (303) 288-0988 Peterschaffer8@gamil.comAtty. Reg. #: 17042
 Case Number:Division:
COMES NOW, Peter Schaffer, the defendant pro se and as a duly licensed attorney in thestate of Colorado , the Shareholders of All Pro Sports & Entertainment, Inc., including PeterSchaffer by and through their counsel of record, Peter J. Schaffer, Attorney at law, AuthenticAthletix and John Rickert herby files and submits the below Counter Complaint against APSE,its majority shareholder, Board of Directors, and C. Lamont Smith, individually states andalleges as follows;
 1. The Court has jurisdiction over the parties and the subject matter of this action because allparties are either residents of Colorado, have transacted business in Colorado, and/or thedefendant has committed tortuous acts in Colorado.2. Venue is proper in this Court pursuant to C.R.C.P. 98 because the parties agreed that alllitigation would be in this county and because it is designated by Plaintiff.3. This Court has jurisdiction over this action pursuant to as directors of a Colorado corporation;the Individual Defendants have consented to the jurisdiction of this Court pursuant to theshareholder agreement4. APSE, Inc. (“APSE”) is a corporation organized in 1987 under the laws of the State of Colorado with a principal place of business in Denver, Colorado. APSE was located at all timesat 36 Steele Street, Suite 100, Denver, Colorado 80206. APSE was in the business of representing professional athletes as sports agents. APSE represented clients in the NationalFootball League (“NFL”).5. Counter Defendant, Charles Lamont Smith (“Smith”), at all times relevant hereto, was anofficer, majority shareholder, president, CEO, and director of APSE and is a resident of the Stateof Colorado and regularly conducted business in the state of Colorado.6. Counter Defendant, Damien Moore (“Moore”), at all times relevant hereto upon informationand belief, was an employee of APSE and regularly conducted business in the state of Colorado.7. Shareholder, and counter Plaintiff Peter J. Schaffer (“Schaffer”), at times relevant hereto, wasand is a minority Shareholder of APSE. Schaffer is a resident of the State of Colorado. At othertimes he was also an employee, an officer and a member of the board of directors of APSE.8. John Rickert, lives at 16 Brendan Lane, Niskayuna, New York, 12309. Rickert prior toresigning his association with APSE in July of 2011 was associated with APSE.9. Smith and an another shareholder, incorporated APSE, a Colorado Corporation in 1987. In1988, the original minority shareholder returned his interest to APSE and resigned from theboard of directors. In 1988, Schaffer purchased a minority interest in APSE and became anemployee and a 12% shareholder of APSE as well as APSE’s vice president and a minoritymember of APSE’s board of directors. Smith remained the majority shareholder and retainedcontrol of the Board of Directors.10. Both Smith and Schaffer are certified agents by the National Football League PlayersAssociation which is the labor union that represents the players of the National Football League.The NFLPA also sets rules and a code of conduct for Agents (“Certified Contract Advisor”) andthese Rules (“NFLPA Regulations Governing Contract Advisors”) include rules prohibitingcontract advisors from initiating contact with a player who is signed to a SRA (“StandardRepresentation Agreement”) with another certified contract advisor. The NFLPA has the powerto sanction and punish Certified Contract Advisors who violate the Regulations. In addition and
at all times relevant to this complaint, Smith is also a certified Contract Advisor with theNational Basketball Association Players Association (“NBAPA”). The NBAPA regulates theconduct of certified contract advisors and precludes certified contract advisors from paying orgiving anything of value to any athlete with collegiate eligibility remaining.11. From 1989 until 2003 Smith, as the majority Shareholder, President and CEO of APSE,improperly took inequitable distributions from APSE and spent APSE funds and assets onpersonal and non-corporate expenses and investments without receiving either shareholder orboard approval or acknowledgment and took illegal and unauthorized distributions from thecompany above the percentage of ownership he maintained in the company. There are nocorporate minutes during this period of time authorizing such expenses, expenditures ordistributions. In addition, Smith also on occasions diverted agent fee income owed to thecompany to his other companies during this period of time.12. Sometime in 2002 or 2003, Smith unilaterally decided to re-organize the company with thestated goal of retiring approximately $1,600,000 in debt he owed to the company from illegaldraws, investments, loans and distributions beyond his stated shares and ownership of thecompany all without board or shareholder approval. This restructuring was done not for thebenefit of APSE or the minority shareholders but for the benefit of Smith individually. Inaddition, APSE required Smith to sign a loan document evidencing a loan from APSE for$160,000 and Schaffer to sign a similar loan document evidencing a loan from APSZE for$30,000. Schaffer never received any proceeds from this loan from APSE. Neither loan has beenretired. APSE made a demand of Schaffer for this loan repayment but not of Smith.13. This debt resulted from various failed business ideas and ventures of Smith such as but notlimited to the "Black Movie Channel," "Elite clothing company," and a joint venture with LosAngeles lawyers to act as competing sports agents to the business of APSE (“APSEInternational”) financed by illegal and unapproved distributions personally taken from APSE bySmith. All of the business were categorical and substantial failures, were funded entirely bymonies taken unilaterally from APSE by Smith without corporate approval, authorization orformality and did not further the business of APSE.14. In addition, Smith’s APSE International project not only lost substantial sums of APSEmoney it directly competed against the main business of APSE i.e. representing professionalathletes and required the majority shareholder, CEO, and President of APSE to take substantialtime away from APSE to participate in the competing activities of APSE International in breachof his fiduciary duty, employment agreement and obligations and officer responsibilities toAPSE. At no time during any of these transactions did either Smith or APSE offer to theminority shareholders their corresponding ownership distribution percentage of monies taken bythe Smith from APSE. In addition, Smith diverted funds and fees owed to APSE to these entities,again in dereliction of his duties owed to APSE.15. In exchange for eliminating the $1,600,000 in debt of the majority Shareholder, Smith,unilaterally increased Schaffer’s ownership interest in APSE from 12% to 30%. The was wellbelow fair market value of the corporation for such an interest. In addition, Schaffer was requiredto sign a Shareholders’ Agreement with APSE and to execute an Employment Agreement. Both

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