Mark Cuban, a huge proponent and investor in the United Football League, is suing the third-year professional football league for a $5 million loan he says should have been paid back by October.
Cuban says Bill Hambrecht, co-founder of the UFL -- yes, Apple and Google's Hambrecht -- was supposed to pay back the loan by Oct. 6 of this year. Cuban and his HDNet, which broadcast some of the league's games, entered into a deal that would give Cuban interest at the rate of one percent per annum. When the loan was not paid back on time, a new deal was made. to be paid back by Dec. 1 at the rate of 15 percent per annum.
According to the lawsuit, "on or about December 1, 2010, Plaintiff demanded that Defendants fulfill the terms of Defendants' guaranty, and pay the debt owed to Plaintiff in accordance with that guaranty, but no part of the debt has been paid."
"It was only a loan, and (it's) personally guaranteed by one of the founder's trust," Cuban told the Dallas Observer Thursday.
Thursday, vice president of communications for the UFL, Michael Preston, gave FanHouse this exclusive statement:
When Cuban initially loaned money to the UFL back in April 2010, he thought it was a smart investment, considering the potential growth of the league as well as the possibility it could benefit from a potential NFL lockout in the summer 2011."The loan from HDNet is one of a number of issues we are dealing with internally. We have every expectation that the matter will be satisfactorily resolved in due course.
"With respect to our outstanding payables, we have a plan in place and are aggressively working to pay all who are owed outstanding payments by the UFL. We are refining our plans with the full intention of going forward with the 2011 season.
"As we have said previously, we like many companies regrettably do not always meet our intended turnaround on payments in these tough economic times when we find ourselves behind in cash flow. We like all new businesses are not immune from the effects of a stagnant economy."
Throughout the 2010 UFL season, Cuban has appeared on HDNet, proclaiming his passion for the league. When the UFL was under fire for charging a $150,000 transfer fee to the UFL, Cuban said the league had every right to protect its property.
Some good things just have to come to an end.