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Fertittas are officially defendants in fraud case re: Xyience

We’ve been talking about the shit potentially hitting the fan for a while now with Xyience and while no poop has flown yet, it certainly looks like it’s being primed to fly. Basically the Fertittas have been named as defendants in a case involving Xyience’s original shareholders:

On March 13 the plaintiff shareholders amended their complaint to include Fertitta Enterprises and Zyen, private companies owned by UFC co-owners Frank and Lorenzo Fertitta, as defendants. The complaint alleges that Zyen and Fertitta Enterprises aided and abetted Xyience’s corporate directors in breaching their fiduciary duty to shareholders as well as engaged in a conspiracy to defraud shareholders.

The source of the allegations is the Fertittas’ $12 million loan to the company last fall. According to the complaint, the loan was repayable in one year with a 15-percent interest rate and collateralized by all of Xyience’s assets. The terms also allegedly included warrants for 10 percent of capitalization of the company at one cent per share and 50 percent of the company’s equity if Xyience failed to repay.

Thus in the event of default, the Fertittas could purchase 60 percent of Xyience’s stock for a nominal purchase price. Additionally, the default provision would also be triggered if the shareholders voted to remove any members of the board.

The complaint alleges that this loan “was neither in the best interests of the shareholders or the company. Indeed, the Fertitta funding did not fund Xyience. Rather, it provided Xyience funds that were immediately used to fund a debt owed to the Ultimate Fighting Championship, which is owned by the Fertittas.”

We’ve outlined the situation a few times but let me do it once more: CEOs with connections to the Fertittas are put in place at Xyience. The CEOs make retarded deals with the Fertittas where they accept a loan which immediately gets paid to the UFC. Since the money was used to pay the UFC instead of paying for uuuh, stock to sell, Xyience had no way to earn money to pay back the loan. Xyience defaults on the loan, and the Fertittas take over the company.

Basically at this point it looks like the people running the company took the loan specifically to fuck Xyience over and allow the Fertittas to take control. This would be all well and good if it wasn’t for all the original stock holders who have basically been left holding their dicks.

I’m hoping that the next FightOpinion radio has a bit of Judge Jeff Thaler in it to talk about the legal ramifications of such a situation. At this point I’ve seen enough to think that the Fertittas were definitely involved in fucking Xyience over. The only question is if they can be on the hook for it legally.

  • Higgz

    So what does that do to the lawsuit against Rich Bergeron? Doesn’t this validate everything he’s getting sued for saying?

  • selfdestructo

    If the Fertitas were not on the board, then they have no fiduciary commitment to the stockholders, right? What they did was obviously shady, but is it there fault the chairpeople are stupid?

  • fightlinker

    Yeah, but they can’t conspire with the CEOs to defraud the stockholders. The stockholders are accusing them of colluding to fuck over the company … while it’s definately worse for the CEOs involved, it’s still a big deal to get nailed for that.

    A lot of what Rich Bergeron was saying related to the former owner of Xyience and the money they were basically bilking from the company for bogus expenditures. This story is sorta different, but sorta not because it’s just a continuation of the same sort of monkey business

  • Higgz

    Either way, I’m sure this lawsuit will be brought up as an exhibit “A” or “E” or “X” whatever letter he’s on. Even if it get’s tossed out the judge can’t mentally erase the fact that he knows this company is shady.

  • bruceleesreincarnation

    It’s amazing how much Rich Bergeron knew about all of this so long ago….and everyone thought he was nuts…just blowing smoke. For the Fertittas to be able to maintain their casino license they pretty much have to be irreproachable and this could really affect them and be a detriment to keeping their casino license. Or on the other hand maybe they have so much money they can buy enough lawyers for none of this to even touch them. I guess we shall see.

  • Rich Bergeron


    An Excerpt:

    “All the while, even Zuffa’s own fighters, the guys who fought and LITERALLY shed blood all those years over that Xyience logo, got screwed out of their Xyience money. We’re talking guys who literally wore the Xyience logo on their sleeves, over their hearts, or on their shorts, and they got shafted. Chuck Liddell had one-million shares of Xyience stock according to 2005 and 2006 audit numbers from A.J. Robbins. Creditors in the Xyience bankruptcy case include: Travis Lutter; Rich Franklin, Inc.; Matt Serra; Heath Herring; Evan Shoman; and Anderson Silva Enterprises, Incorporated. Bankruptcy paperwork lists several other UFC fighters with Xyience financial issues. The company says they “may be in payment default” in regards to: Michael Bisping ($2,000); BJ Penn ($25,000); Forrest Griffin ($43,333.35); Matt Hughes ($49,999.98); Rich Franklin ($21,000); Josh Koscheck ($21,666.68); Chuck Liddell ($165,000); and Mike Swick ($28,083.35). Other MMA personalities sponsored by Xyience have also been hung out to dry. Payments have also been neglected for: Cung Le ($40,664) and Xyience Model Rachelle “Leah” ($50,000).”

  • Rich Bergeron

    Looks like they literally gave Matt Hughes their two cents.

  • Guido Manetti

    The Borgata Fertitta and their Capo, Bill Bullard, seem to think their problem will go away by having their cafones, Kirk Sanford and Adam Frank, lay low and resign from the board, after they took the Xyience shareholders and creditors for a ride. Well their problem won’t go away, even with Kirk Sanford and Adam Frank being clocked. The two babbos, Michael Levy and Omer Sattar, their messaggero to Karim Maskatiya, have planned to flip and sing like canaries. The whole administration is looking at the stir. Which gavone is going first?

  • Solo

    so that xplains why xyience has basically fallen off the map. good for me…i’m picking up supplements for 1/4 of what they retail for. i have no problem if xyience wants to sponser me, and they don’t have to pay me. just as they do to the big names.