Algie Management, LLC v. VSM Sports

A quick read through the NFLPA’s Active Player Agent List, and no “Gregory Williams” or variation of that name is found.  But there is good reason for that.  However, on his company’s website, VSM Sports, Williams lists a few active clients including Bertrand Berry, Ahmad Brooks, Terrence Holt, Torry Holt, and Gerard Ross.  The NFLPA reports that Berry is represented by Anthony Flanagan, Brooks is self-represented, Torry Holt is represented by Kennard McGuire, and Terrence Holt and Gerard Ross are not listed.  Is Gregory Williams lying?  It would not be the first time.

Under the News section on the VSM Sports Website, it says “News Coming soon.”  Do you think that Williams will report that he and his company have been sued in North Carolina?  Probably not, but I will.

The complaint, which is attached at the bottom of this post, was filed by Algie Management, LLC and Algernon Alston.  I will give the basic facts and allegations in bullets.

• In March 2008, Williams asked Alston to invest $500,000 in VSM Sports, which had a guaranteed return of at least 15% of that investment.  Alston would be able to cash out after two years.  Williams promised that the money would be parked in a corporate account and used to leverage additional resources for VSM Sports.
• Alston purchased a 16% minority ownership in VSM Sports based on representations made by Williams.
• VSM Sports, did not even exist as of April 2, 2008.  The company was formed in May of that year.  Thus, VSM Sports did not have a “value” when stock was sold to Alston.
• In July 2009, Williams asked Alston for more money for a new venture.
• Somewhere in between March 2008 and July 2009, Williams lost his license to be an NFLPA Certified Advisor.
• In September 2009, Alston requested the return of his investment + 20%.
• Williams responded that he could not honor Alston’s request.

Is Gregory Williams full of lies?  Does he currently represent the players listed on his website?  If so, has he once again been licensed by the NFLPA, or is he breaking their regulations?  If he has once again been licensed, did they certify him after apparently lying to investors about what he would do with their investments, and even more importantly, seeking investment for a company that did not yet even exist?

The complaint alleges that Williams breached the contract, which Alston believes should pay him a minimum of $200,000 right this second.  It also claims that Williams is guilty of fraud, unfair and deceptive trade practices, piercing the corporate veil, and civil conversion.  Alston also seeks punitive damages.

As I learned last year in Corporations Law, when a corporation acts before the company is officially incorporated, there can be personal liability.  Did Williams make a good faith attempt to incorporate VSM Sports prior to seeking outside investment from Alston?  Had he already sent articles to the proper agency?  If so, it seems as if both parties looked to the corporation for obligation of payment, so there would not be a good chance that Williams be held personally liable.  If not, though, then he has an uphill battle.

An interesting claim is also based on Williams possibly piercing the corporate veil.  In this claim, Alston is asking the court to disregard VSM Sports and hold Williams liable for the debts.  The corporation is more likely pierced when there is fraud, which is a claim of its own within the complaint.  But the fraud spoken of in piercing the corporate veil is something less than true fraud.  It’s something between fraud and innocent activity (quasi-fraud).  It also seems as if there was extreme undercapitalization of VSM Sports, which would lead a court to believe that the corporate veil was pierced.