Kyle J. Kimpler

Ultimate Fighting Championship fighters suing the mixed martial arts organization for wage suppression are accusing it in Nevada federal court of withholding a large amount of evidence key to the UFC's bid to force their antitrust claims into arbitration. The fighters, led by Kajan Johnson, argued in a brief filed Saturday that the discovery in their lawsuit, as well as in a related antitrust class action filed by professional MMA fighter Mikhail Cirkunovs, will likely reveal that the arbitration clauses of defendants Zuffa LLC, TKO Operating Co. LLC dba UFC, and Endeavor Group Holdings Inc. are unenforceable. The court has previously found that the fighters' monopsonization claim against Zuffa and the UFC bears directly on the fairness of Zuffa's arbitration clauses, the brief said. A monopsony is a market condition similar to a monopoly, but dominated by a single buyer rather than a single seller. According to the brief, U.S. District Judge Richard F. Boulware said in an August minute order that additional discovery would help him determine whether Zuffa and UFC's arbitration agreements or class-action waivers are procedurally unconscionable under Nevada law and the Federal Arbitration Act because of unequal bargaining power. "In the [Oct. 30] hearing precipitating this filing, the court stated: 'I do think and do find that the evidence related to monopsonization is relevant for the inquiry as it relates to the arbitration agreement, particularly on the issue of unconscionability,'" the brief said. Also, the fighters argued, Zuffa and the UFC's August motion to compel arbitration in Cirkunovs' case can't be adjudicated because the state of discovery at this point is "severely lacking." "Virtually non-existent from defendants' productions are every type of document and all the information necessary to adjudicate defendants' motion to compel arbitration as well as the merits of this case generally," the brief said. "Defendants (i) have not collected documents from all the appropriate sources; (ii) have used inadequate and inappropriate search and culling methodologies and processes to review the documents collected; (iii) appear to have failed to preserve (and spoliated) critical documents and communications; and (iv) repeatedly failed to fully comply with this court's orders." Judge Boulware's August order also rejected the UFC's motion seeking to deny class certification for the Johnson fighters, saying the request is premature. Zuffa and the UFC had argued that the Johnson plaintiffs cannot be class representatives because they did not sign the arbitration agreements or class action waivers that the majority of fighters in the proposed class have signed. "But plaintiffs are currently challenging these provisions as unconscionable," Judge Boulware wrote. "Were the court to agree, Zuffa's objection would be moot." Zuffa had moved in April to deny class certification in the Johnson suit. It said it added arbitration clauses and class action waivers to its fighter contracts after 2017, which is the end point for the class in a similar, settled lawsuit filed and led by fighter Cung Le in 2014. However, the court said it retains broad discretion when handling the class certification process, especially when it comes to discovery. "At a minimum, additional discovery will help the court determine whether these provisions are procedurally unconscionable under Nevada law and, accordingly, the Federal Arbitration Act," Judge Boulware wrote in his August order. Because most of the fighters in the Johnson lawsuit signed agreements that said they would resolve disputes through arbitration, the UFC has said they have waived their right to participate in a class action, citing Ninth Circuit precedent in Lawson v. Grubhub . The lawsuits accuse Zuffa and the UFC of running an anticompetitive scheme to maintain monopoly and monopsony power in the market for professional mixed martial arts bouts and fighters. The defendants have suppressed competition, leading to anticompetitive wages and other antitrust injuries and damages, the suits claim. Counsel for the fighters declined to comment Wednesday. Counsel for the UFC did not immediately respond to a request for comment. The fighters are represented by Michael Dell'Angelo, Eric L. Cramer, Patrick F. Madden, Robert C. Maysey, Kyla Gibboney and Joshua P. Davis of Berger Montague, Michael J. Gayan of Kemp Jones LLP, Joseph R. Saveri, Kevin E. Rayhill and Christopher Young of the Joseph Saveri Law Firm LLP, Richard A. Koffman, Benjamin D. Brown and Daniel H. Silverman of Cohen Milstein Sellers & Toll PLLC and W. Joseph Bruckner, Kyle J. Pozan and Brian D. Clark of Lockridge Grindal Nauen PLLP. Zuffa, TKO and Endeavor are represented by Christopher S. Yates, Aaron T. Chiu, Sean M. Berkowitz, Laura R. Washington and Joseph Axelrad of Latham & Watkins LLP, William A. Isaacson, Jessica E. Phillips and Agbeko Petty of Dunn Isaacson Rhee LLP and Donald J. Campbell and J. Colby Williams of Campbell & Williams. The cases are Johnson et al. v. Zuffa LLC dba Ultimate Fighting Championship and UFC et al., case number 2:21-cv-01189, and Cirkunovs v. Zuffa LLC et al., case number 2:25-cv-00914, both in the U.S. District Court for the District of Nevada.

Nov 12

4 min

The New York bankruptcy judge overseeing Eletson Holdings' Chapter 11 case has raised sanctions against three Cypriot corporations connected to the shipping company's former owners to $5,000 a day for failing to reverse changes to the board of an Eletson affiliate. In an order issued Wednesday, U.S. Bankruptcy Judge John P. Mastando III raised the sanctions against the three companies from the $1,000 a day they had previously been facing for failing to follow his orders to reverse the changes to Eletson Gas. "The court now concludes that compliance has not been effectuated, and, to the extent necessary, that the proof of noncompliance is clear and convincing, and that the Cypriot nominees have not diligently attempted to comply in a reasonable manner," he said. Eletson Gas had been a joint venture between Eletson and shipping rival Levona, and the companies fell into a dispute over ownership. An arbiter found in favor of Eletson, awarding the company $102 million and ordering that Levona's preferred shares in Eletson Gas be given to three Cyprus-incorporated entities affiliated with then-Eletson directors Vassilis Kertsikoff and Laskarina Karastamati. Before Eletson could get a court order enforcing the award, Eletson's creditors pushed the company into an involuntary bankruptcy in March 2023. In October 2024, Judge Mastando confirmed a plan that transferred ownership of the business to creditor Pach Shemen LLC, a subsidiary of Levona's parent company, Murchinson Ltd. Following confirmation, Eletson Gas continued to be the subject of international legal wrangling, with Eletson's former majority shareholders arguing the affiliate was not part of the bankruptcy estate and that they retained control. Judge Mastando has previously found the former shareholders, including Karastami, in contempt of his orders and has imposed increasing fines. In the meantime, the parties continued to dispute the arbitration award in district court, with Levona seeking to overturn the award on the basis of a claim that Eletson fraudulently withheld documents from the arbiter. Wednesday's order was in response to a joint sanctions motion by Eletson and Levona, arguing the three Cyprus entities had changed the registry of the preferred shares and named Kertsikoff and Karastamati Eletson Gas officers in February despite the fact the arbitration award had not been confirmed, and had failed to comply with an August order by Judge Mastando to rescind the changes or face $1,000 a day in contempt fines. The entities argued they had complied with the August order by sending Eletson Gas a letter rescinding the changes and that was all they had the power to do, but in his Wednesday order Judge Mastando said they had changed the share registry and board composition themselves in February and there was no reason to believe they can't change them back. "The court further agrees with movants that compliance with this court's August contempt opinion and order requires more than merely sending a letter requesting changes, which is all their purported compliance letter claims to do," he said. Counsel for the parties did not immediately respond to requests for comment Thursday. Eletson is represented by Kyle J. Ortiz, Brian F. Shaughnessy, Jennifer Sharrett and Andrew Citron of Herbert Smith Freehills Kramer LLP. Levona is represented by Isaac Nesser of Quinn Emanuel Urquhart & Sullivan LLP. The Cyprus entities are represented by Hal S. Shaftel, Maura E. Miller and Adam Kirschbaum of Greenberg Traurig LLP. The bankruptcy case is In re: Eletson Holdings Inc. et al., case number 1:23-bk-10322, in the U.S. Bankruptcy Court for the Southern District of New York.

Nov 20

3 min

A New York federal judge has ruled that a group of former shareholders of Eletson Holdings have no standing to appeal an order consummating the shipping company's Chapter 11 plan and no grounds to appeal sanctions for failing to follow the order. In a Monday order rejecting five separate appeals of bankruptcy court orders, U.S. District Court Judge Lewis J. Liman said the Greek entity controlled by former shareholders can't appeal because it doesn't legally exist, and that they earned their sanctions by failing to follow specific instructions from the court. "They did not have license to ask the bankruptcy court to reorganize [Eletson] and then simply to disobey the court's orders when they disliked how the company was reorganized," the judge wrote. Eletson, which operates oil and gas tankers, launched a Chapter 7 case in 2023, after a group of creditors alleged the company had defaulted on about $354 million in notes and other debts. The case was then converted into Chapter 11. In October 2024, the court approved a Chapter 11 plan handing ownership over to the creditor group, rejecting an alternative plan proposed by the former controlling shareholders. However, in November, the former owners obtained an order from a Greek court appointing a provisional board of directors that has since contested implementation of the plan. A bankruptcy judge in New York entered an order in January 2025 that consummated the Chapter 11 plan and ordered the former owners and their entity, referenced in documents as Provisional Holdings, to comply with the order by updating corporate documents and ship registry information. In February, the court found the former owners in contempt for failing to comply with the order, and fined them $1,000 a day, then increased that penalty to $5,000 the following month. Provisional Holdings, the former owners and their counsel, Reed Smith LLP, appealed the plan consummation order and the sanctions to district court. In his order, Judge Liman said Provisional Holdings has no standing to appeal because it has no legal existence. He said the pre-bankruptcy Eletson ceased to exist when the bankruptcy plan was confirmed, and that in June, the Greek court that appointed the provisional board reversed itself, finding its 2024 order had been invalid and rejecting the argument that the plan confirmation was not effective in Greece. "Understanding both that there is not now and never was a legitimate 'Provisional Holdings' under Greek law and that the confirmation plan did not create such an entity under U.S. law, Provisional Holdings' remaining arguments flounder," the judge said. The former shareholders and Reed Smith did not have standing because they weren't aggrieved parties, Judge Liman added. "The consummation order did not itself diminish the property of Reed Smith or the former majority shareholders, increase their burdens, or detrimentally affect their rights," he wrote. The judge also said the bankruptcy court did not abuse its discretion in imposing the sanctions, saying the parties were given specific instruction on the actions they needed to take to follow the consummation order and that they unquestionably failed to do so. Counsel for the parties did not immediately respond to requests for comment Tuesday. Eletson is represented by Kyle J. Ortiz, Brian F. Shaughnessy, Jennifer Sharret and Andrew Citron of Herbert Smith Freehills Kramer LLP. Provisional Holdings is represented by Louis M. Solomon and Colin A. Underwood of Reed Smith LLP. The former shareholders are represented by Lawrence M. Rolnick, Richard A. Bodnar and Frank T.M. Catalina of Rolnick Kramer Sadighi LLP. The appellate cases are Eletson Holdings Inc. et al. v. Reorganized Eletson Holdings, case numbers 1:25-cv-01312, 1:25-cv-01685, 1:25-cv-02897, 1:25-cv-02824 and 1:25-cv-02811, in the U.S. District Court for the Southern District of New York. The bankruptcy case is In re: Eletson Holdings Inc. et al., case number 1:23-bk-10322, in the U.S. Bankruptcy Court for the Southern District of New York.

Sep 23

3 min

Families of Sandy Hook Elementary School shooting victims have pushed back against a bankruptcy trustee's attempt to relinquish equity interests in conspiracy theorist Alex Jones' Free Speech Systems LLC, telling a Texas bankruptcy court Friday that doing so would frustrate their collection of more than $1 billion in judgments. The trustee had earlier this month given the court notice of his intent to abandon ownership interest in FSS on the grounds that it was "burdensome" to the bankruptcy estate and was of "inconsequential value and benefit to the estate." But families of the 2012 shooting victims told the bankruptcy court on Friday that such an abandonment is "premature" and would likely harm the estate's creditors, forego potential recoveries, and lead to more delays in their efforts to collect more than $1 billion in defamation damages. "Jones has proven time and time again that he will seek to delay and prolong this case to prevent the Sandy Hook families from collecting on their over one billion dollars' worth of judgments against him and [Free Speech Systems] for as long as possible," they argued. "Jones has employed various strategies over the past three years to frustrate the Families' efforts to collect any of what they are owed." The families had won more than $1 billion in damages in 2022, stemming from their claims that Jones defamed them by accusing them of being actors whose children were never killed in the Dec. 14, 2012, Sandy Hook massacre, which he had declared a hoax. Jones has since conceded that the shooting happened. Last week, the U.S. Supreme Court refused to take up Jones' appeal of the roughly $1.4 billion defamation judgment, in which he argued that a Connecticut state court unconstitutionally imposed a "death penalty" on his media business in violation of the First Amendment. Jones argued in his petition for a writ of certiorari that the court improperly handed down a default judgment against him and FSS, and then allowed a jury to award the damages to the Sandy Hook victims' families without requiring any factual showing that he made defamatory statements about them. Aside from the Connecticut judgment, a Texas state jury had awarded a separate group of families $45.1 million in damages. Jones and his media companies have filed several bankruptcy cases. Last summer, a Texas bankruptcy judge dismissed a Chapter 11 case of FSS and converted Jones' personal bankruptcy case to a Chapter 7. On Oct. 3, Christopher Murray, the Chapter 7 trustee, filed his notice of proposed abandonment. In opposing the abandonment notice, the Sandy Hook families said Friday that retaining the FSS interests "does not burden the estate in any material way." They said that the interests "do not utilize estate resources or cause the estate to incur additional costs and expenses." Nor will retaining the interests result in any delay to the administration of Jones' chapter 7 case, the families said. They further argued that the interests could be sold for value and provide a benefit to the Chapter 7 estate. The families also noted that they're working on organizing a bid for the interests. "While the Sandy Hook families need additional time to properly diligence a potential purchase, they expect to be able to engage substantively with the trustee on a purchase of the FSS interests in the coming weeks," they said in their filing. In warning against abandoning the interests to Jones, the families argued that if the interests were to revert to him, there was "no doubt that Jones would immediately seek to file FSS for bankruptcy once again." The families said that a second FSS bankruptcy filing would "cause further gridlock in the parties' respective position and forestall any progress" in their efforts to collect "after several years of delay." "The practical result of allowing the trustee to abandon the FSS Interests would be to set this case back by nearly 18 months," the families wrote. Counsel for the parties did not immediately respond to requests for comment late Monday evening. The Texas Sandy Hook families are represented by Jennifer J. Hardy, Stuart R. Lombardi and Deanna Drenga of Willkie Farr & Gallagher LLP, Avi Moshenberg of Lawson & Moshenberg PLLC, and Jarrod B. Martin of Bradley Arant Boult Cummings LLP. The Connecticut families are represented by Ryan E. Chapple of Cain & Skarnulis PLLC, Alinor C. Sterling of Koskoff Koskoff & Bieder PC, and Kyle J. Kimpler, Paul Paterson, Daniel S. Sinnreich and Vida J. Robinson of Paul Weiss Rifkind Wharton & Garrison LLP. Jones is represented by Ben C. Broocks of Broocks Law Firm PLLC, and Shelby A. Jordan of Jordan & Ortiz PC. Murray is representing himself, and is represented by Jacqueline Chiba and Erin Elizabeth Jones of Jones Murray LLP, and Joshua W. Wolfshohl of Porter Hedges LLP. The case is In re: Alexander E. Jones, case number 22-33553, in the U.S. Bankruptcy Court for the Southern District of Texas.

Oct 20

4 min

A New York bankruptcy judge disqualified Reed Smith LLP from continued work in the Chapter 11 case of reorganized oil and gas shipping company Eletson Holdings on Thursday, saying the law firm's clients no longer exist. During a hearing, U.S. Bankruptcy Judge John P. Mastando III said a New York district court judge had ruled that the former owners of Eletson that Reed Smith represented — referred to as Provisional Holdings or more recently, Unreorganized Holdings — never existed under U.S. or Greek law, representing a change in the facts since the bankruptcy court last declined to remove the firm from the Chapter 11 case. "The circumstances have clearly changed since the court last considered this issue, and there is no longer a client in existence for Reed Smith to represent," Judge Mastando said. He said Reed Smith attorneys can continue to represent the firm itself in the proceedings as appropriate. Eletson creditors pushed the company into an involuntary Chapter 7 bankruptcy case in March 2023, and the debtor later successfully sought a conversion to a Chapter 11. In October 2024, the New York bankruptcy court confirmed a plan that transferred ownership of the business to creditor Pach Shemen LLC. Post-confirmation, international legal wrangling has occupied the debtor as the former majority shareholders petitioned foreign courts for relief, including obtaining a ruling from a Greek court that created the provisional board of Eletson that purported to control the business. Last month, U.S. District Judge Lewis J. Liman issued a series of rulings in litigation among Reorganized Eletson, Provisional Holdings, and rival shipping company Levona and its owner, Murchinson Ltd. In those rulings, Judge Liman directed Reed Smith — which represented Eletson prior to and in the beginning of its bankruptcy case — to turn over documents to Levona that Eletson had allegedly withheld during a pre-bankruptcy arbitration in which Eletson was awarded $102 million. In another of those rulings, Judge Liman found Provisional Holdings did not have standing to appeal rulings of the bankruptcy court because it did not legally exist in light of the Greek court recently overturning its own order creating the provisional board of Eletson. Reorganized Eletson sought Reed Smith's disqualification via letter in September, saying since the bankruptcy court last considered the firm's role in the post-confirmation proceedings, the state of play had changed. "There is just no purpose in our mind for something we consider to be an interloper," Eletson attorney Kyle J. Ortiz of Herbert Smith Freehills Kramer LLP said at Thursday's hearing. Louis M. Solomon of Reed Smith said his clients believe that Reorganized Eletson is trying to commit a "hostile takeover" of gas shipping assets not included in the bankruptcy case, and those issues are on appeal to the Second Circuit, which should be allowed to rule on those appeals. Eletson is represented by Kyle J. Ortiz, Brian F. Shaughnessy, Jennifer Sharrett and Andrew Citron of Herbert Smith Freehills Kramer LLP. Provisional Holdings is represented by Louis M. Solomon and Colin A. Underwood of Reed Smith LLP. The bankruptcy case is In re: Eletson Holdings Inc. et al., case number 1:23-bk-10322, in the U.S. Bankruptcy Court for the Southern District of New York.

Oct 16

2 min