Headline Sports Law

Chad Morton v. Leigh Steinberg, et al.

Earlier this week, Sports Agent Blog referenced a lawsuit between Chad Morton and Leigh Steinberg and many of his companies and affiliates.  While that post is largely focused on a man named David Meltzer and a company called Sports 1 Marketing, this post will look at the pending lawsuit itself, and scrap out the facts of the Complaint so that it is easy for you to digest.  Remember, Complaints are one-sided.  Before you make any judgment, you need to at least see the Defendants’ affirmative defenses and counterclaims.  The Complaint is attached at the bottom of the post.

The Plaintiff is Chad Morton, a former NFL running back and kick/punt returner for the New Orleans Saints, the New York Jets, the Washington Redskins, and the New York Giants.  He was personally represented by Leigh Steinberg and by his company, Steinberg & Associates LLC.

In 2006, Morton sued Steinberg and his companies in an action that included a count of fraud and breach of fiduciary duty.  The parties settled in September 2008, which provided for the Defendants to pay $900,000 to Morton.  In March 2009, the Court entered a stipulated judgment for $900,000 against the Defendants.  Thereafter, other Leigh Steinberg related companies as Judgment Debtors.  Morton’s new case arises because he claims that he has not received any of the $900,000 that he is entitled to.

The new case alleges that the Defendants entered a conspiracy to shield the Judgment Debtors’ assets from collection by Morton.  Morton claims that they went as far as to have Leigh Steinberg’s personal assistant open a new account under her name so that they could stash their money there and shield it from garnishment.  There is also a claim that a lawyer named Amy Stoody, who is a named Defendant, opened a purported client trust account to shield the Judgment Debtors’ assets from collection activities.  All in all, Morton says that roughly $725,000 was shielded from collection by the Defendants depositing the Judgment Debtors’ funds into accounts held in the names of others.

In February 2010, a Standstill Agreement was executed, which gave the Judgment Debtors a 6 month window to generate income to pay the Judgment.  Monthly payments were to begin on June 30, 2010.  Morton says that no payments have been made to this date.

The causes of action are as follows:

  • Transfer of property in excess of $725,000 subject to ORAP lien
  • Conversion
  • Violation of Uniform Fraudulent Transfer Act
  • Unfair business practices
  • Intentional interference with prospective economic advantage

The complaint was filed on September 9, 2010.

One reply on “Chad Morton v. Leigh Steinberg, et al.”

Interesting development to a story that has a lot of twists and turns. I remember meeting David Meltzer Sports 1 Marketing CEO at a Pepperdine University alumni gathering. He gave a presentation on the sports management industry which was quite compelling. At the time, he was working for Leigh Steinberg as his COO and had been involved with every aspect of the operations.

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