Update on Zuffa v. Dream Stage Lawsuit

April 20, 2009

Despite the notoriety of the parties and the purported value of the claims, this action is a simple case of buyer’s remorse–nothing more.  – from Defendant’s Motion to Dismiss

Zuffa’s lawsuit against the former owners of Pride continues in District Court in Nevada. The parties are currently arguing a partial motion to dismiss filed by the defendants. What follows is a very basic summary of the current action, however, I should note that I have not seen the Plaintiff’s response.

As you may remember, Zuffa’s case to invalidate the sale was largely built on a background check requirement that they allege Mr. Sakakibara failed to comply with. The defendant’s response argues that while Sakakibara did in fact comply with the provision, it is irrelevant to the sale itself. The motion argues that the provision in question was merely a condition to Sakakibara’s continuing participation as a consultant, not to the sale itself.

In support of this claim the brief points out that the background check requirement is actually found in a section describing the purchaser’s obligations, in a clause discussing Zuffa’s obligation to maintain the Pride brand. As a result the motion argues that while Sakakibara’s failure to participate in a background check could invalidate Zuffa’s obligation to maintain the Pride brand, it has no bearing on the underlying asset sale.

The defendant’s position in a nutshell:

Contrary to the allegations in their Opposition, Plantiffs got exactly what they wanted from Defendants. They eliminated PRIDE, which was the number one competitor to their mixed martial arts brand event–the Ultimate Fighting Championship. By acquiring PRIDE’s assets and thereafter terminating its operation, the owners and operators of the UFC effectively killed PRIDE. Plantiffs now want to rewrite the Asset Purchase Agreement in hopes of reducing their cost to eliminate their primary competitor. The unambiguous contract language, however, dooms the majority of their claims at the pleading stage.

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