By: M. Wayne Patton
I wrote previously about the things we can all learn from OJ Simpson (besides how to get away with murder). Now Lance Armstrong is about to teach us all a thing or two about asset protection planning.
Lance Armstrong has an estimated net worth of about $125 million. The one thing $125 million will definitely buy you in the wake of a doping scandal is a giant target to hang on your back. So Lance Armstrong has discovered, as he’s now being sued by the U.S. Government and several other private companies.
The Justice Department is suing Armstrong to recover sponsorship money paid to him by the United States Postal Service between 2001 and 2004, even though studies have shown that those sponsorships yielded significant returns to the USPS in the same years. The gist of the lawsuit is simply that the USPS has been irreparably damaged in subsequent years by its close affiliation with the doping cyclist.
Other have jumped on the lawsuit bandwagon, but in a different context than you might expect. The Dallas-based promotions company SCA is suing Lance Armstrong to recover $12 million in bonuses it paid to him for winning multiple Tour de France titles. The irony is that SCA originally refused to pay the bonuses because of allegations that Armstron had violated anti-doping rules. Armstrong vehemently protested and filed suit against SCA. Armstrong’s suit eventually settled with SCA paying him $7.5 million. Now SCA wants that money back, as does a London based newspaper that paid Armstrong a $500,000 settlement over allegations of libel related to doping.
It’s very atypical for settled cases to be reopened, but it seems that Armstrong could be the poster child for a new precedent, since he so clearly lied to everyone except Oprah.
Lance Armstrong and Asset Protection
Time will surely tell if Lance Armstrong has any asset protection in place other than a corporation called Tailwind that was the contracting party with Armstrong’s sponsors. As the New York Times reported, “Mr. Armstrong put a layer of legal protection between himself and the money. And if nothing else, it shows that he has had good legal counsel over the years.” But a simple corporation might not be enough in the wake of the biggest doping scandal to date.
Lance should just feel lucky that he’s being pursued by Nike, the sports giant that been jilted at that alter of sponsoring athletes so many times it doesn’t know what to do.