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≡ GRAND SLAM TRACK ≡
Grand Slam Track’s suppliers and vendors, owed in excess of $13 million and offered a 1.5% payback under the proposal bankruptcy plan, asked the U.S. Bankruptcy Court in Delaware to allow it to directly sue lead investor Winners Alliance, founder Michael Johnson and the circuit’s officers and directors.
A total of 14 different causes of action are alleged; seven against Winners Alliance, five against Johnson and two against all of the directors and officers of Grand Slam Track.
The background, of course, is that Grand Slam Track ran up debt of more than $40 million in putting on three meets in the April, May and June 2025. The lengthy filing by the Official Committee of Unsecured Creditors notes that the internal business plan for Grand Slam Track (“Debtor”) forecast significant losses for the first two years:
● “Debtor expected to lose $27 million in 2025, despite also projecting $14.5 million in revenue. In fact, the Debtor’s business model projected negative EBITDA in 2026 even when revenue was projected to reach $55 million. In its investor presentations, the Debtor did not expect to be profitable, under its projections, until 2027 when revenue was forecasted to reach $89.7 million. Even at that lofty number, EBITDA was only projected to be $2.2 million.
“Put differently, the Debtor and Winners Alliance knew that significant additional investments were required to fund the business, and the business could not sustain itself based on the projected revenues under their internal budget forecast. The Debtor and Winners Alliance created and knowingly implemented a business model that required significant cash outlays, and the Debtor’s only source of working capital beyond the initial seed investment was the potential $25 million line of credit from Winners Alliance set forth in the Investment Outline.”
● “Despite the unrealistic overly optimistic revenue projections, the Debtor only generated a paltry $1.8 million in revenue for 2025 despite completing three ‘Slam’ events, far short of the projected $14.5 million in revenue that was necessary to narrow the losses to $27 million.”
● “As a result of proceeding with two (2) events without sufficient capital and committed third-party financing, and potentially illegally promising athletes prizes for winning events, for the first six months of 2025, the Debtor lost $37.2 million. Had the Debtor ceased operations after learning that Eldridge [Industries] was not moving forward with the proposed investment, the Debtor would have significantly reduced the amount it owed all of its creditors.”
The proposed lawsuit claims that Winners Alliance, the for-profit arm of the Professional Tennis Players Association, “made clear that its top priority is not ensuring the Debtor’s business prospers or that the Debtor’s creditors are protected, but that its reputation in the athletic industry is shielded from any reputational damages” and that it has “now agreed to fund a Plan that would pay athletes at least 85% of what they were owed on the Petition Date, bringing the amount the athletes will receive from the Debtor to well over 90% of what their contracted for payments were, while at the same time only offering only 1.5% to the trade vendors.”
The proposed suit, which must be approved by the Bankruptcy Court to be filed, asks for Winners Alliance’s claims of debt to be disallowed on the basis that such funds actually represented ownership in Grand Slam Track and asks for damages of not less than $25 million each on four different allegations of fraud and other issues. Further, the suit asks for a decision at trial that “Winners Alliance is responsible for the debts of the Debtor.”
The suit takes issue with a $500,000 payment to Johnson as partial repayment of a $2 million loan which is not evidenced in any Board minutes of Grand Slam Track, as preferred self-dealing, and asks for $25 million in damages. There is a similar demand against the Grand Slam Track Board members for fraud and breach of fiduciary duty.
A reply filed by Grand Slam Track slaps back against the Committee of Unsecured Creditors in direct language, including
“The Objection is based on a fundamental misunderstanding of quintessential plan confirmation (not disclosure statement) issues and can be best characterized as an ill-conceived proposal to destroy the Debtor’s future prospects and jeopardize the New Value Contribution so that the Committee (which consists solely of a minority of trade creditors) can attempt to pursue its unsubstantiated litigation scheme against Winners Alliance and the Debtor’s officers and directors.”
This filing notes that the proposed plan – which pays almost nothing to the unsecured creditors – will provide $6 million in new funding. In terms of payments under the plan, this will almost all go to the athletes. The filing continues:
“The Committee’s half-baked, unsubstantiated, risky and punitive alternative to a reorganization is a litigation quagmire which will result in: (1) no assurance of any recovery to any creditor; (2) the end of the Debtor’s future business prospects; and (3) an administratively insolvent estate.”
The Grand Slam Track filing asks for the proposed plan to be approved so that it can be voted on by all of those owed money, under the 85% to athletes and 1.5% to vendors scenario.
Winners Alliance also filed a reply, saying that it was a minority shareholder and no more:
“The Committee’s Objection tells a fundamentally different – and fundamentally false – story. Lacking a genuine legal basis to contest the Motion, the Committee resorts to disparaging rhetoric and a series of inflammatory allegations that are both unsupported and irrelevant to the issues before the Court.
“The Committee’s transparent tactic to extort additional funds from WA through a reputational smear campaign should not be countenanced. The Committee’s opposition is full of unsubstantiated claims.”
The Winners Alliance filing noted that the television production entity, Momentum-Carr Hughes, which is the largest creditor, “was paid over $2.224 million of its $5.277 million in 2025.” That was for production services for the three meets that were held.
The parties won’t have long to wait for their day in court, as the matter will be heard on Thursday (12th) at 2 p.m. Eastern before Judge Karen B. Owens.
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