SBJ/February 17 - 23, 2003/Labor Agents

Union: Chapter 11 can’t stop us

The NFL Players Association believes it has the right to discipline sports agent David Dunn even though he has filed for Chapter 11 bankruptcy protection, said Jeffrey Kessler, outside counsel for the union.

Dunn
The union's disciplinary committee, which issued a complaint charging Dunn with six violations of its agent regulations in January, had not decided by press time what discipline, if any, should be imposed on Dunn.

"The players association believes this bankruptcy filing appears to be a bad-faith attempt to hold off discipline," Kessler added.

Dunn filed a bankruptcy petition last week immediately after a judge affirmed a $44.66 million verdict against Dunn and Athletes First. The company did not file for bankruptcy protection.

Mark Humenik, general counsel for Dunn's agency, Athletes First, said, "Dunn has filed for Chapter 11 bankruptcy protection so he could appeal the judge's decision and continue servicing his clients."

Dunn's bankruptcy lawyers sent a notice to the union last week saying that the union was prohibited from "doing any act which affects or impairs in any way [Dunn's] certification by the National Football League Players Association to act as a contract advisor."

Humenik wouldn't comment on whether the union has the right to punish Dunn.

The union will likely ask the court for approval of any discipline against Dunn, Kessler said.

"I am not saying we have to," he said, "but to be prudent we will in all likelihood file a motion in bankruptcy court before carrying out any discipline."

A Los Angeles jury ruled in November that Dunn and Athletes First had to pay damages to Dunn's former employer, Steinberg Moorad & Dunn. U.S. District Judge Ronald Lew last week ordered Dunn to pay an additional $2.6 million in legal fees to the firm headed by prominent agent Leigh Steinberg. Steinberg sued Dunn after Dunn left the agency in 2001, taking 50 clients with him.

Dunn's bankruptcy petition listed Steinberg Moorad & Dunn as his largest creditor, with a claim of $4.66 million. Of the $44.66 million jury verdict, $4.66 million was against Dunn personally. The bankruptcy petition, which was filed on Feb. 10, did not list the $2.6 million in legal fees Lew assessed last week.

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