Sweet Brown Koko Posted April 13, 2020 Report Share Posted April 13, 2020 XFL files for Chapter 11 bankruptcy: https://www.espn.com/xfl/story/_/id/29030763/xfl-files-chapter-11-bankruptcy-suspending-operations Quote Link to comment Share on other sites More sharing options...
NintendoLogic Posted April 14, 2020 Report Share Posted April 14, 2020 The XFL's bankruptcy filing revealed that the WWE held an ownership stake in the league, which pretty well puts the lie to the notion that the two businesses were completely separate. Apparently, it was done to make up for the fact that Vince turned down a $50 million offer for the XFL trademark from the AAF and gave it to himself basically for free, which was a major breach of his fiduciary duty since the trademark was owned by WWE and not Vince personally. It must be nice being rich enough that the law doesn't apply to you. Quote Link to comment Share on other sites More sharing options...
Slasher Posted April 14, 2020 Report Share Posted April 14, 2020 I'm not seeing the problem here. The XFL was a privately owned entity. There were no other shareholders beyond the WWE and Vince personally. Now I guess one could argue that he has a responsibility to the WWE stockholders but what would they be objecting to if Vince is giving himself the trademark for free? It's not their investment. I will admit I am not in the know here, so please correct me if I'm wrong here. Quote Link to comment Share on other sites More sharing options...
NintendoLogic Posted April 14, 2020 Report Share Posted April 14, 2020 As CEO, Vince has a duty to place the interests of the company ahead of his own business interests. The XFL trademark was WWE's intellectual property. What he did with it would be like if he turned down an offer to buy a building owned by WWE and then sold it to himself at below market value. Quote Link to comment Share on other sites More sharing options...
Slasher Posted April 14, 2020 Report Share Posted April 14, 2020 Alpha Entertainment owned the trademark as of December 2019. Vince turned his personal stocks in WWE into cash for the league. So who is he not being responsible to? Is he required to sell to an outsider just because they made an offer? I could see that argument if Vince refused to sell the WWE to Disney for a trillion dollars and he turned around and sold the WWE to Alpha for 5 cents, because the WWE is publicly traded. XFL isn't. Quote Link to comment Share on other sites More sharing options...
NintendoLogic Posted April 14, 2020 Report Share Posted April 14, 2020 Alpha owned the trademark because Vince sold it to them (read: sold it to himself) in his capacity as CEO of WWE. Before that, it belonged to WWE. Vince McMahon and WWE are separate legal entities. When dealing with property belonging to WWE, Vince has a duty to act in the best interests of the company. There's no way selling a company-owned trademark to a shell corporation at well below market value after turning down a much larger offer can be rationally construed as such. Quote Link to comment Share on other sites More sharing options...
Migs Posted April 14, 2020 Report Share Posted April 14, 2020 2 hours ago, NintendoLogic said: Alpha owned the trademark because Vince sold it to them (read: sold it to himself) in his capacity as CEO of WWE. Before that, it belonged to WWE. Vince McMahon and WWE are separate legal entities. When dealing with property belonging to WWE, Vince has a duty to act in the best interests of the company. There's no way selling a company-owned trademark to a shell corporation at well below market value after turning down a much larger offer can be rationally construed as such. Just chipping in as a lawyer that NintendoLogic is dead on - this would be exactly the thing shareholders could sue Vince for. He'd basically have been looting the corporation for himself. WWE receiving the shares protects against that (since it would basically be converting one asset, the trademark, for assets of equal value, the shares). Quote Link to comment Share on other sites More sharing options...
Shrike02 Posted April 14, 2020 Report Share Posted April 14, 2020 Without diving into the potential issue of jurisdiction in a hypothetical lawsuit by shareholders against McMahon, speaking as another lawyer here on the board I too think the above discussion is spot on. Quote Link to comment Share on other sites More sharing options...
Slasher Posted April 14, 2020 Report Share Posted April 14, 2020 According to wiki, Vince was already getting involved in reviving the XFL by December 2017. Ebersol approached him about selling in December of 2018. Why would Vince sell if he intended to get it back up and running? Because the price tag is pretty? Sorry guys, you're probably somewhat right about all of it, I just don't agree he did anything wrong here. Quote Link to comment Share on other sites More sharing options...
Al Posted April 14, 2020 Report Share Posted April 14, 2020 Instinctively, I think Slasher is right here. Vince's obligation is to deliver accurate financial information to his investors. Beyond that, he's the largest stakeholder and (nominal) owner of both companies. His duty is whatever he sees fit. If he didn't misrepresent his company to gain investors, then I think he's on ethically firm ground. Legally is another matter, but I am nowhere near qualified to see how that shakes out. Quote Link to comment Share on other sites More sharing options...
Migs Posted April 15, 2020 Report Share Posted April 15, 2020 23 hours ago, Slasher said: According to wiki, Vince was already getting involved in reviving the XFL by December 2017. Ebersol approached him about selling in December of 2018. Why would Vince sell if he intended to get it back up and running? Because the price tag is pretty? Sorry guys, you're probably somewhat right about all of it, I just don't agree he did anything wrong here. It's not that he had to sell, but if he was going to sell (which he did, from WWE to the XFL), the offer would have established that there was some value, so he can't sell it for zero. The problem in particular is selling from WWE (which has many shareholders) to the XFL, which only he owns. If he had sold the trademark for a dollar to, essentially, himself, he's stealing from the public shareholders. It seems like, instead, WWE sold the trademarks to the XFL in exchange for stock (which is totally fine, presumably the stock was a good approximation of the value of the trademark). 21 hours ago, Al said: Instinctively, I think Slasher is right here. Vince's obligation is to deliver accurate financial information to his investors. Beyond that, he's the largest stakeholder and (nominal) owner of both companies. His duty is whatever he sees fit. If he didn't misrepresent his company to gain investors, then I think he's on ethically firm ground. Legally is another matter, but I am nowhere near qualified to see how that shakes out. The problem is that he was the sole owner of one and not the sole owner of the other. It's easier to see the problem if the XFL had actually succeeded, because that would have proven the trademarks were valuable. And in that case, if he hadn't given WWE some stock in the XFL, Vince would be capturing all that value for himself. If the XFL made a ton of money, and paid a dividend, all the money goes to Vince - when instead, the trademwark was really the property of all the shareholders in WWE, by percentage, and they should have shared in that in that money. Quote Link to comment Share on other sites More sharing options...
flyonthewall2983 Posted August 3, 2020 Report Share Posted August 3, 2020 https://cultaholic.com/posts/the-rock-and-redbird-capital-buy-the-xfl?fbclid=IwAR30clk8MNKEjxvgkroQdV7fyTOWz3DEPsSSz9XmJnFUGYU_GoOlj4YhUqY Quote Link to comment Share on other sites More sharing options...
kas Posted August 3, 2020 Report Share Posted August 3, 2020 Right, so who had that on their 2020 bingo cards? Quote Link to comment Share on other sites More sharing options...
MoS Posted August 3, 2020 Report Share Posted August 3, 2020 Remember when Vince McMahon let Rock's contract expire in late 2004 due to a "clerical oversight"? Who would have thought he would one day be buying business ventures from Vince. Quote Link to comment Share on other sites More sharing options...
NintendoLogic Posted October 1, 2020 Report Share Posted October 1, 2020 Quote Link to comment Share on other sites More sharing options...
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