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Kurt Busch files multimillion-dollar countersuit vs. former management agency SMN

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Kurt Busch filed a multimillion-dollar countersuit Friday in the U.S. District Court’s Eastern District of Michigan against Sports Management Network, which sued the NASCAR driver for $1.4 million.

Busch, who is demanding a jury trial in the counterclaim lawsuit, alleges that the sports management company and its law firm “improperly advantaged themselves” along with the interests of clients Team Penske and Andretti Autosport. The countersuit states that Busch wasn’t made aware of such conflicts and wasn’t advised to seek independent counsel.

Busch and SMN entered into a representation contract in 2005 that was extended Aug. 11, 2010 while Busch was driving for Penske (he previously was with Roush Fenway Racing). Busch drove for Andretti in the 2014 Indianapolis 500, finishing sixth.

The suit refutes the claims made by SMN last month that Busch was delinquent in his payments to the company since the second quarter of 2016. He terminated the deal in March 2016.

Busch’s suit states that he maintained an attorney client-relationship with John Caponigro of Sports Management Network and the law firm of Frasco Caponigro Wineman & Scheible “at all relevant times,” covering all matters and transactions related to Busch’s career.

Busch’s suit requests the court enter a judgment in his favor against SMN, FCWS and Caponigro for “millions of dollars to be proven at trial plus all such other relief that the Court deems just and appropriate.”

Busch is asking for at least $1.3M from SMN and Caponigro for compensation received from the driver from January 2011 to January 2016.

In a response to the countersuit, Frasco Caponigro Wineman & Scheible, PLLC, which is representing Sports Management Network, released a statement:

“Defendants’ allegations are outrageous and have no factual basis. It is a shame that, in an effort to avoid paying fees that are owed, Defendants instead have chosen to disparage the impeccable reputation of our clients who, for more than a decade, maximized Mr. Busch’s career opportunities, financially and otherwise, often during times when Mr. Busch’s conduct, both on and off the track, threatened his career.  We are confident that the court will see through what is nothing more than a desperate, diversionary tactic.”

The counterclaim states that SMN AND FCWS had “fiduciary, legal, ethical and contractual duties to act in Busch’s best interests” but breached their obligations and caused millions in damages.

SMN also represents NASCAR drivers Brad Keselowski and Ryan Blaney (both of whom are under contract to Penske), according to its website. It has represented other Penske drivers (such as Sam Hornish Jr.) in the past.

The lawsuit also revealed several details about Busch’s contracts.

When it entered into a four-year extension with Busch in 2010, SMN received a 4% fee of Busch’s base salary. That sum was $250,000, meaning Busch’s base salary for 2010 at Penske was $6.25 million.

The lawsuit notes Busch was due to make “considerably less” under future contracts with Phoenix Racing, Furniture Row Racing and Stewart-Haas Racing.

The lawsuit also refers to a two-year deal with Monster Energy for Busch from 2016-17 with an option for 2018, but it’s unclear if that refers to a personal services deal or team sponsorship.

Busch is represented in the counterclaim by the Detroit-based law firm of Barris, Sott, Denn & Driker, P.L.L.C.

Click here to see the counterclaim lawsuit filed on Kurt Busch’s behalf.

Dustin Long contributed to this report.

Kurt Busch sued by former management company for $1.4 million

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DAYTONA BEACH, Fla. – Kurt Busch has been sued for $1.4 million by Sports Management Network, which contests the NASCAR driver hasn’t paid its fees since terminating his deal with the company.

The lawsuit, which initially was reported by MLive.com, was filed Feb. 8 in U.S. District Court’s Eastern District of Michigan. It names Busch and Kurt Busch Inc. as defendants. SMN alleges that Busch has been delinquent in his payments since the second quarter of 2016 and owes at least $930,450.

The company also is asking Busch to cover interest, costs and attorney’s fees, bringing the requested judgment from the court to $1,470,450.

According to SMN, the last payment by the Stewart-Haas Racing driver was $117,167 for the first quarter of 2016.

A representative for Busch referred requests for comment to Alan Miller, a lawyer from Birmingham, Mich., who counts several auto racing drivers among his client list (including seven-time champion Jimmie Johnson).

Miller told NBC Sports that the SMN lawsuit was without merit and would be defended “vigorously” by Busch.

John P. Caponigro of SMN stated in an affidavit that Busch hadn’t paid “despite SMN’s repeated demands for payment on the account.”

According to the lawsuit, Busch terminated his contract with SMN in March 2016. The driver and company had entered into a representation contract in 2005 that was extended Aug. 11, 2010.

The contract was reworked in May 2012 to reduce Busch’s annual financial burden to SMN from $250,000 to $125,000 after he moved from Team Penske to Phoenix Racing because “it became apparent that the money that Defendants would receive in 2012 from KB’s professional driving activities would be a fraction of what they previously received.”

In July 2012, Busch and SMN agreed that starting in January 2013, Busch would owe the retainer plus 10 percent of all revenue from personal services agreements.

The lawsuit states “Subsequently, SMN negotiated and finalized multiple agreements for Defendants, including, but not limited to, driver appearances, sponsor agreements, personal services agreements, pursuant to the terms of which Defendants will be paid compensation through 2018.”

According to the suit, Busch has been invoiced for $930,450.07 pursuant to the 2017 season that has gone unpaid.

SMN claims being entitled to another $540,000 (which hasn’t been invoiced) based on Busch’s earnings for the 2018 season.

Click here to view a copy of the lawsuit.

 

Kyle Busch Motorsports suing Justin Boston, sponsor company Zloop

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Kyle Busch Motorsports is suing former driver Justin Boston and Zloop, a company owned by Boston’ father, Bob, according to a report by ESPN.

The lawsuit concerns the failure by Boston and Zloop to provide $650,000 in payments of a $3.2 million annual agreement that allowed Boston to drive in the Camping World Truck Series for KBM. Boston has competed in 10 series races the last two years. All nine of his KBM starts in the No. 54 Toyota were in 2015, with his last being the June race at Iowa Speedway.

ESPN says the lawsuit was filed Friday in North Carolina Superior Court in Iredell County and that KBM claims it is owed $4.025 million for the alleged default on the contract.

The contract was for two years at $6.4 million. With 23 races on the Truck schedule, 46 races over two seasons would equal Boston paying KBM $139,130 a race.

The report also indicated it might be difficult for the KBM to receive the payments from Zloop, a computer recycling company co-founded by Bob Boston. The company filed for Chapter 11 bankruptcy in early August. The elder Boston is embroiled in another lawsuit – for $28 million – by a former Zloop investor claiming Boston “lied to him about the value of Zloop and did not use his investment as intended, including spending money on Justin’s racing career as part of a Zloop marketing program.”

KBM’s claims against Zloop will be processed in Delware bankruptcy court and those against Justin Boston will play out in North Carolina.

ESPN reports Zloop also owes money to Bristol Motor Speedway ($131,250), Kentucky Speedway ($75,000), Pocono Raceway ($36,601) and the NFL’s Carolina Panthers ($87,000).