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.