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AAF funder Tom Dundon trying to sue his way out of paying the league's debts

Former AAF owner Tom Dundon is arguing in bankruptcy court he shouldn't be held legally responsible for the league's debts, according to a filing obtained by The Athletic.

Dundon, a Dallas-based billionaire and owner of the NHL's Carolina Hurricanes, committed to a $70 million investment shortly after the Alliance's February launch, providing necessary funding to keep the league afloat through its inaugural season. However, almost as quickly as he swooped in to save the league, Dundon began maneuvering to kill it, sparking questions about why he invested in the first place.

Now, if Dundon's filing is to be believed, we know why. According to Dundon's legal team, he was lied to or deliberately misled by AAF co-founder Charlie Ebersol about the dire state of the venture's finances, both in the amount of cash needed to survive to Year 2 and its liabilities both in monies owed to vendors and a lawsuit from someone claiming Ebersol stole the idea that eventually became the AAF.

“Even though AAF executives told DCP (Dundon Capital Partners) its contribution would get the AAF through the first season, those executives knew at the time of the execution of the Term Sheet that the AAF would likely need an additional $50,000,000 (including League revenue) on top of DCP’s investment of up to $70,000,000 to get through the first season,” the filing said. “The AAF and its executives never disclosed this information to DCP.”

Dundon said he was not appraised of the AAF's $13 million in debts, along with the suit by Robert Vanech arguing he should own 50 percent of the league after allegedly being shut out of the venture by Ebersol back in 2017. Sports Illustrated this month provided an inside look at the fractured (at best) relationship between Dundon and Ebersol, who spent more time at odds over the league's direction than they ever spent together.

Dundon's camp is attempting to remove Dundon Capital Partners from any obligation to creditors by shifting that responsibility to Ebersol's group and insurance policies triggered by the AAF. The league has outstanding liabilities of $48 million against $11 million in assets. In a stunningly poignant detail from the SI story, one remaining AAF asset that has value is the leftover football equipment, bid on at auction by the XFL.

After launching on Feb. 9, the AAF shut down play during its first season on April 2.

Read the full story here.