The suit says Schmidt and Northrup would not have played in the league had they known the AAF "was not financially viable from the outset." The document also alleges that "the intent of its main investor was to fraudulently, deceptively, and pretextually acquire underlying intellectual property and/or technology from the league and then cease league operations."
The suit later goes into more detail on those charges, accusing Dundon—who's also the founder of Dundon Capital Partners—of investing in the AAF not because of the football, but because of the league's other assets. The filing alleges that "the true motivation of Defendant Dundon was to acquire the smartphone application intellectual property that could be used for gambling on player performance in fantasy football and real time proposition bets," and that Dundon has continued developing those products in the wake of the league's shutdown.
That language seems to be in line with previous reports indicating that Dundon might have hoped to spin off the AAF's tech assets into a separate business.
In addition to questioning Dundon's motivations, Schmidt and Northrup allege that the league's executives continually misled players. The suit quotes Ebersol saying shortly after the announcement of the AAF's formation last year that "if you are not committed [for] seven to ten years, you are not taking seriously." Dundon made similar statements in the wake of his investment in February, saying the league was "good for many years to come with what I just did."
There's also, of course, the matter that players signed three-year contracts with the AAF, agreeing to be paid $70,000 for the inaugural season, $80,000 in year two and $100,000 in the final year of the deal. That money doesn’t appear to be forthcoming.
For a league that existed for less than two months, the AAF has sure had a knack for churning out legal paperwork. In February, a VC veteran named Robert Vanech filed a lawsuit of his own against Ebersol claiming a "conspiracy" that forced him out of the league's leadership.
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