Professional Documents
Culture Documents
Belinda Hernandez
D C -2 O - 0 17 96
NOPC'ZO'O1796
CAUSE NO.
Defendants.
COME NOW, Plaintiff Legacy Fighting Alliance, LLC (“LFA” or “Plaintiff’) and files
0r
d/b/a AXS (“AXS”), and Anthem Sports & Entertainment (“Anthem”, and together with
With AXS, the
I. INTRODUCTION
Imagine that it is a Friday night. After a long week at work, you are getting ready to
t0 host
friends in your living room t0 watch the live televised mixed martial arts fight 0f
of the season.
Unfortunately, no idea that Defendants AXS and Anthem unilaterally cancelled the fight
you have n0
lawsuit because this scenario happened not just once, but nine times from September through
December 20 1 9.
annual mixed martial arts events promoted by LFA. Robert Thoele, AXS’S CFO and General
Counsel requested in writing that LFA agree t0 extend the Agreement m, asking for a rooster
0f events t0 g0 through December 2019. LFA agreed t0 extend the Agreement, in reliance that
AXS would satisfy its obligations under the Agreement. But in September 2019, when at least nine
televised events remained under the Agreement, AXS abruptly repudiated the Agreement, refusing
t0 televise the remaining events. The same month AXS merged with the sports media entity
Anthem. Despite the fact that the Agreement fully binds successors and assigns like Anthem, Ed
Nordholm, Anthem’s Chief Corporate Officer, brazenly informed LFA that the Agreement was
cancelled, and that Anthem would not broadcast the nine remaining fights 0f the 2019 events
season.
Defendants’ wrongful conduct and willful breaches 0f the Agreement caused LFA t0
sustain a ripple effect 0f damages. LFA lost in excess 0f $20,000 per cancelled fight in addition t0
lost profits. Defendants’ unilateral cancellation 0f the 2019 fights also interfered with LFA’S
contracts with third parties who provide services required t0 stage and promote the then scheduled
events. Even more, Defendants’ conduct greatly damaged LFA’S reputation. Viewers in over 53
million homes nationwide were precluded from Viewing anticipated LFA fights that were supposed
t0 be broadcast subject t0 the Agreement’s terms. Perhaps the most troubling damage that LFA
suffered as a result 0f Defendants’ wrongful conduct has been the loss 0f LFA’S hard-earned trust
by athletes whose careers are made from being featured in LFA promoted fights. The damages that
LFA suffered as a result 0f Defendants are significant. Accordingly, through this lawsuit, Plaintiff
1. Plaintiff intends that discovery be conducted under Level 2 pursuant t0 Rule 190.3
of the Texas Rules 0f Civil Procedure (“TRCP”). Plaintiff affirmatively pleads that this suit is not
governed by the expedited-actions process in TRCP 169 because Plaintiff seeks monetary relief of
over $ 1 00,000.
organized under the laws 0f the State 0f Texas which maintains a registered agent at 1999 Bryan
t0 d0 business in Texas. AXS is the original contracting party 0f the Agreement with LFA subj ect
0f this lawsuit. AXS may be served through its registered agent Capitol Services, Inc., 1675 S.
State Street, Suite B, Dover, Delaware 19901 with a copy 0f the Petition also served t0 its local
address, 18583 Dallas Parkway, Suite 150, Dallas, Texas 75287 0r if unable, through the Texas
Secretary 0f State.
successor in interest and/or assign 0f AXS under the Agreement. Anthem is an active Ontario
Business Corporation with a place 0f business located at 171 E. Liberty St, Suite 245, Toronto,
Ontario M6K 3P6. A copy 0f the Petition may served 0n Anthem in accordance with the
Convention 0f 15 November 1965 0n the Service Abroad 0f Judicial and Extrajudicial Documents
in Civil or Commercial Matters (the “Hague Convention”). Pursuant t0 the Hague Convention, a
copy 0f the Petition may be served 0n the Ministry 0f the Attorney General Ontario Court 0f Justice
0n Anthem.
7. This dispute arises from and concerns the Agreement entered into between LFA
and AXS which sets the laws 0f the State 0f Texas as the governing law applicable t0 this dispute,
and sets mandatory venue 0f the dispute in Dallas County, Texas. Each Defendant is subject t0
this Court’s jurisdiction pursuant t0 the Agreement’s mandatory forum selection clause, which is
expressly “without regard t0 conflict 0f law rules.” See, e.g., CNOOC Se. Asia Ltd. v. Paladin
Res. (SUNDA) Ltd., 222 S.W.3d 889 (Tex. App.—Dallas 2007, pet. denied) (An agreement’s
forum selection clause may bind a successor in interest t0 the agreement, like Anthem.)
Sections 15.002(a)(4) 0f the Texas Civil Practice and Remedies Code. Venue is proper before this
Court, and this Court has general personal jurisdiction over Defendants because Defendants
actively conducted business in the State 0f Texas. Additionally, venue is proper because Dallas
County is the county in which all 0r a substantial part 0f the events 0r omissions giving rise t0 the
claims in the Petition occurred. See, TEX. CIV. PRAC. & REM. CODE §15.002(a)(1).
V. ALTERNATIVE ALLEGATIONS
9. T0 the extent any allegation in this Petition is inconsistent with any other allegation,
such inconsistent allegations are pleaded in the alternative pursuant t0 Texas law. See, e.g., TEX.
10. LFA is a professional mixed martial arts (“MMA”) promotion company that gives
rising stars and top contenders the opportunity to prove their talent to fans and leaders in the
industry, primarily through televised events. LFA does so by giving top MMA prospects and
including in Dallas, Houston, Las Vegas, Los Angeles, and Denver. LFA takes pride in furthering
the careers of its exceptional athletes While developing and maintaining a global fan base. By
promoting and staging televised MMA events nationwide, LFA strives to produce the next
12. AXS is a media entity that holds itself out to be “trusted by the biggest names in
sports?” AXS fumher represents that its technologies and partnerships provide access to the best
live entertainment experiences in the world? Additionally, AXS publicly represents that it
13. In reliance 0n AXS’S reputation and representations, 0n August 25, 2016, LFA and
AXS (collectively, the “Parties”) entered into the Agreement and joined forces to promote and
1
See AXS “Sports”, available at https://solutions.axs.com/sp011s/, last accessed January 21, 2020.
2
See e.g., “About” AXS, available at https://solutions.axs.com/about/, last accessed January 21, 2020.
and stage a yearly roster 0f up t0 30 MMA events (“Event(s)”), and that AXS in turn bore the
15. Pursuant t0 the Agreement, the Parties agreed that AXS would be the “exclusive
sole cost and expense, t0 take the following non-exhaustive measures: (i) obtain all licenses and
permits for the lawful staging 0f Events, (ii) maintain insurance (iii) obtain Event equipment,
including, but not limited t0 canvas ring mat(s) and lighting; (iv) pay certain wages, salaries, fees,
and other compensation 0f third parties affiliated with Events, including, but not limited t0 those
0f the hosting facility, technicians, and audiovisual staff and equipment, (V) pay applicable athletic
commission fees and taxes related t0 Events, (Vi) obtain the right for AXS t0 use the name, likeness
and photos 0f fighters and Event participants, (Vii) any additional fees associated with staging
events, (viii) pay labor fees and union fees, if applicable, among other responsibilities.
17. In exchange for the foregoing and the covenants under the Agreement, LFA
provided valuable consideration, including, but not limited t0, the deal term which granted AXS
18. From August 2016 until Defendants’ September 2019 breach 0f the Agreement,
discussed below, the Parties showcased live Events in over 53 million homes coast t0 coast.
19. Given the vast scale 0f televised Events, should either Party cancel an Event under
non-force majeure circumstances, the Agreement requires the cancelling party t0 pay the non-
breaching party a cancellation fee. Under this clause 0f the Agreement, the cancelling party must
pay the non-breaching party $20,000 for each Event cancelled five days prior t0 the Event, $ 1 0,000
reasonable out-of-pocket fees and expenses incurred in connection with the cancellation 0f the
20. The Agreement includes a provision which grants AXS the exclusive option t0
license LFA’S annual Events by providing written notice, at a specified time, that AXS is excising
the Agreement’s Option (the “Option”). The Agreement contemplated AXS exercising an Option
21. Exercising the Option extends the term 0f the Agreement through the Option
period.
22. On August 29, 2017, Robert Thoele (“Thoele”), CFO & General Counsel 0f AXS,
requested t0 exercise the Agreement’s 2018 Option in a written correspondence t0 LFA titled
“First Amendment t0 Production and Distribution Agreement Between HDNet LLC and LFA
Fighting Alliance, LLC dated, August 25, 2016 (the “First Amendment t0 the Agreement”).
23. The Parties agreed in writing t0 the First Amendment t0 the Agreement, extended
the Agreement, and each agreed t0 provide the services necessary t0 cover a series 0f at least 29
Events.
24. By exercising the 2018 Option, AXS was required t0 compensate LFA $25,000 per
each completed 201 8 Event from January 201 8 through December 2018.
25. On August 28, 201 8, Thoele requested t0 exercise the Agreement’s 2019 Option in
Agreement Between HDNet LLC and LFA Fighting Alliance, LLC dated, August 25, 2016 (the
extended the Agreement, and each agreed t0 provide the services necessary t0 cover a series 0f at
least 28 Events from January 2019 through December 2019. AXS, having exercised its 2019
27. Further, by exercising the 2019 Option, AXS was required t0 compensate LFA
28. For about two years, LFA enjoyed a consistent working relationship with AXS.
From January 2017 through September 2019, the Parties joined forces t0 produce and televise 7_6
M-
29. However, everything changed in September 2019.
Anthem acquires a majority interest in AXS, and Defendants proceed t0 breach the
outstanding obligations that AXS owed t0 LFA.
30. In September 20 1 9, with at least nine Events remaining under the 2019 Option that
AXS elected t0 exercise, LFA learned through the press that Anthem acquired a controlling interest
in AXS, becoming successor in interest and/or assign t0 AXS under the Agreement.
31. The Parties are permitted t0 assign their rights under the Agreement. In such an
event, the Agreement remains binding 0n any successors and assigns 0f the Parties, the assignee
must agree t0 be bound by the terms 0f the Agreement, and notably, the assignor is not relieved 0f
32. Defendants fully disrupted LFA’S business 0n 0r about September 11, 2019, at
which time Anthem’s Chief Corporate Officer Ed Nordholm (“Nordholm”), informed LFA that
Anthem was unilaterally cancelling the remaining rooster 0f 2019 Events (the “Cancelled 2019
Events”).
34. Defendants cancelled the first 0f the Cancelled 2019 Events within just 2 weeks 0f
35. Defendants willfully cancelled the Cancelled 2019 Events without the presence 0f
36. Defendants failed t0 provide an explanation for their willful cancellation of the
Cancelled 2019 Events. Defendants must be held accountable for their intentional misconduct that
37. Plaintiff respectfully repeats and re-alleges all other allegations in this Petition as
38. The Production and Distribution Agreement between Plaintiff and AXS, including
the First Amendment t0 the Agreement, and the Second Amendment t0 the Agreement, is a
39. AXS, through its executive agent Thoele, voluntarily elected t0 exercise AXS’S
40. In reliance on AXS’S exercise 0f the 2019 Option, LFA performed its obligations
41. LFA is the proper party t0 bring suit for breach 0f contract against AXS.
42. LFA performed, tendered performance 0f, 0r was excused from performing its
cancelling at least nine Cancelled 2019 Events in non-force majeure circumstances. AXS further
breached the Agreement by failing t0 satisfy its contractual obligations post-merger with Anthem
during the 2019 Option period. By its express terms, the Agreement fully binds successors and
assigns like Anthem, while not relieving assignor AXS 0f its contractual obligations t0 LFA.
44. AXS’S willful breach has caused LFA t0 suffer injury in an amount 0f not less than
45. AXS’S willful breach also caused LFA t0 sustain damages associated with third
party expenses incurred in connection with LFA promoting and staging the Cancelled 2019
Events, which Defendants unilaterally cancelled at the last minute in non-force majeure
circumstances.
46. AXS’S willful breach caused LFA t0 suffer significant reputational damages as
well. AXS’S conduct tarnished LFA’S goodwill, reputation, and brand with: (i) national
sponsors, (ii) Viewers who planned t0 watch scheduled fights promoted by LFA that were
ultimately cancelled, (iii) ticket purchasers who planned t0 attend scheduled fights promoted
by LFA that were ultimately cancelled, (iv) athletes who invested their name, likeness, and
career development in scheduled fights promoted by LFA that were ultimately cancelled, and
47. Plaintiff respectfully repeats and re-alleges all other allegations in this Petition as
the First Amendment t0 the Agreement, and the Second Amendment t0 the Agreement, is a
49. AXS and Anthem merged 0n 0r about September 2019. Through this merger,
Anthem became a successor and/or assign t0 AXS 0f the Agreement, and assumed AXS’S
50. By its express terms, the Agreement remains binding 0n any successors and assigns
0f the Parties, like Anthem. Representations made by Anthem’s Chief Corporate Officer
Nordholm t0 LFA, further confirm that Anthem was aware 0f the Agreement, and the
5 1. LFA is the proper party t0 bring suit for breach 0f contract against Anthem.
52. LFA performed, tendered performance 0f, 0r was excused from performing its
53. Anthem willfully breached the Agreement with LFA by among other things,
54. Anthem’s willful breach has caused LFA t0 suffer injury in an amount 0f not less
than $700,000 in actual damages, in addition t0 attorneys’ fees, costs and expenses.
55. Anthem’s willful breach also caused LFA t0 sustain damages associated with third
party expenses incurred in connection with LFA promoting and staging the Cancelled 2019
Events that AXS and Anthem unilaterally cancelled at the last minute, none 0f which were
party expenses incurred in connection with LFA promoting and staging the Cancelled 2019
Events.
57. Anthem’s willful breach caused LFA t0 suffer significant reputational damages as
well. Anthem’s conduct tarnished LFA’S goodwill, reputation, and brand with: (i) national
sponsors, (ii) Viewers who planned t0 watch scheduled fights promoted by LFA that were
ultimately cancelled, (iii) ticket purchasers who planned t0 attend scheduled fights promoted
by LFA that were ultimately cancelled, (iv) athletes who invested their name, likeness, and
career development in scheduled fights promoted by LFA that were ultimately cancelled, and
58. Plaintiff respectfully repeats and re-alleges all other allegations in this Petition as
59. In order t0 stage and promote the Events, LFA had t0 engage the services 0f third
parties t0 provide services such as providing the Event space, equipment, audiovisual services,
60. LFA also had t0 engage the services 0f third parties in connection with the
Agreement’s requirement that LFA obtain Event equipment, including, but not limited t0
canvas ring mat(s) and lighting, among other third party Event related fees.
61. Having hosted 76 Events over more than two years under the Agreement with LFA,
AXS knew that LFA entered into third party agreements for the provision 0f services related
t0 Events.
LFA had valid third party contracts for the provision 0f services related t0 the Cancelled 2019
Events.
63. By willfully cancelling the nine Cancelled 2019 Events, AXS and Anthem caused
a domino effect 0f damages t0 LFA, including, but not limited t0, interference with LFA’S
numerous third party agreements for the provision 0f services related t0 the Cancelled 2019
Events.
64. AXS and Anthem willfully and intentionally interfered with LFA’s third party
agreements for the provision 0f services related t0 the Cancelled 2019 Events.
66. LFA incurred actual damage 0r loss as a proximate cause 0f Defendants’ wrongful
67. Plaintiff respectfully repeats and re-alleges all other allegations in this Petition as
68. AXS concealed from 0r failed t0 disclose certain facts t0 LFA about AXS’S merger
with Anthem.
69. When LFA learned 0f AXS’S merger with Anthem in September 2019, AXS was
still responsible for performing its agreed 0n obligations under the Agreement in connection
70. As contracting parties with LFA, AXS had a duty t0 disclose the facts t0 LFA about
its merger with Anthem. AXS also had a duty t0 disclose the facts t0 LFA about its merger
Events, and performing its contractual obligations in connection with each Event.
71. The facts about the Anthem merger that AXS concealed from 0r failed t0 disclose
72. AXS knew that: (i) LFA was ignorant 0f the facts related t0 the Anthem merger,
and (ii) that LFA did not have an equal opportunity t0 discover the undisclosed facts about the
Anthem merger.
74. By failing t0 disclose the facts about the Anthem merger, AXS intended t0 induce
75. LFA relied 0n the representations made by AXS. AXS m extended the
Agreement, and exercised the 2019 Option, among other material representations made by AXS
that LFA relied 0n. Through its representations, AXS induced LFA t0 continue t0 promote 2019
Events, secure third party services necessary t0 stage the 2019 Events, among other acts.
77. LFA was injured as a result 0f acting without the knowledge 0f the undisclosed
described herein, Plaintiff was caused t0 suffer severe injuries and damages, for which it seeks
(1) actual and special monetary damages (including compensatory and consequential
damages), in an amount t0 be determined at trial;
(5) due t0 the deliberate, willful, and malicious nature 0f Defendants’ conduct as described
herein, Plaintiff seeks and is entitled t0 recover punitive damages from Defendants in
an amount t0 be determined by the jury.
79. Plaintiff hereby respectfully requests a trial by jury and submits the appropriate fee
herewith.
X. PRAYER
appear and answer herein, and that the Court enter judgment against Defendants, and award all
damages to Plaintiff t0 which Plaintiff is entitled under law and equity; for pre-judgment interest
in accordance with law and/or at the highest legal rate; for interest 0n the judgment; for costs 0f
suit; for attorneys’ fees; and for such other and further relief, either at law 0r in equity, to which
/S/Michael K. Hurst
Michael K. Hurst
Texas State Bar N0. 103 1 63 1 0
mhurst@lvnnllp.com
Chisara Ezie-Boncoeur
Texas State Bar N0. 24103714
cezie-boncoeur@lynnllp.com
LYNN PINKER COX & HURST, LLP
2100 Ross Avenue, Suite 2700
Dallas, Texas 75201
(2 14) 98 1 -3 800 - Telephone
(2 14) 98 1 -3 839 - Facsimile