My seemingly ’suite’ deal that turned sour. . .
February 6, 2010
Over the years I have tried to share my experiences as an entrepreneur in this blog - some experiences that make me seem smarter than I actually am and others that make me seem downright stupid. Unfortunately this week I find myself in the latter position. Eventually most entrepreneurs will find themselves involved in a lawsuit either as either the plaintiff or defendant. I have been on both sides over the years, but this week I learned that the Cowboys were suing a partnership I set up to buy a suite at the new stadium.
Back in 2008 everyone I knew was feeling wealthy. The housing market was frothy, the venture capital market was exploding and everyone seemed to have money in their pockets ready to burn. I was not immune at the time, but now with all the problems going on today (Haiti, Economy, Unemployment, Deficit) my story sounds pretty stupid. In the summer of 2008 I was invited to a sales pitch for the yet-to-be-built Cowboy’s stadium. After a tour and a free steak the salesperson convinced me that it would be smart to buy a suite. It was only $240,000 per year for 21 seats. I explained that while I would love to get the suite, I couldn’t really justify spending $240,000 per year for 20 years. But then she suggested that if I could find nine friends who were similarly interested I could set up a partnership to buy the suite. Each of us would only have to spend $24,000 per year - still expensive, but great for entertaining clients. After recruiting a few business acquaintances I went ahead and created the partnership and paid the $24,000 deposit on the suite.
Before the stadium was completed I got the bill for the full $240,000 and while I was ready to fork over my $24,000, my friends weren’t so excited anymore. Several were unable to pay due to the unexpected turn the economy had taken, others were scared that the economy might get significantly worse. Unfortunately, all of my previously ‘wealthy’ friends were suddenly acting very rational (too bad we all weren’t as rational back in 2008). I was pretty frustrated because I was about to a) lose the $24,000 deposit and b) miss the opening season at the new stadium.
I called our salesperson and explained the situation. She was understanding and agreed to give me more time to put together a new group so I wouldn’t lose my deposit. I spent weeks calling, sending emails, tweeting, blogging and posting facebook pleas to find a new group of Cowboys fans to join me. Surprisingly, I did find replacements and even got some of them to send checks. However, before I had collected all of the checks the Cowboy’s salesperson convinced the ringleader of my new group that there was a better suite available and she convinced them to sign a second agreement. It took a few weeks, but I finally found out what had happened and when I did I was livid. I demanded the Cowboy’s return my deposit and while the salesperson’s manager did apologize, his best offer was to allow me to trade my suite in for a couple of founders seats. I didn’t agree, I wanted my money back. The salesperson had put my group into another suite leaving me without enough time to put a third group together - the Cowboys got their suite sale, but still wanted to keep my deposit. Eventually I emailed their lawyers, explained the situation and requested a full refund.
Of course the other day I heard on the news that Jerry was suing a bunch of companies who defaulted on their suite agreements - including the partnership I set up. I guess they decided not to return my deposit. Unfortunately (or stupidly), when I set up the partnership I used a name that was very similar to the name of one of my other companies. People might assume that the other company that I co-own was somehow involved in my debacle with the Cowboys. I got a call from the newspaper asking me to explain how the two entities were related. Of course the Cowboys didn’t bother to realize the difference and named one of my business partners in the suit (instead of me) - despite the fact that he wasn’t part of partnership. Let me just say he wasn’t too thrilled when he found out.
As I clarified in the newspaper, Scott Ryan and Architel Holdings LLC (i.e. IT company we co-own) are 100% unrelated to the partnership I set up to license the suite at the Cowboy’s stadium. I had intended to use my two seats to entertain Architel clients and the name similarities are now clearly unfortunate - I should have called the partnership “Da Boys Inc.” or something similarly unrelated to avoid any sort of confusion. Regardless of the outcome of the suit my lawyers insist Scott and Architel will be unaffected. I believe that the Cowboy’s suit is merit-less and my lawyers will respond with a counter suit very shortly. Finally, the Cowboy’s lawyer was quoted as saying a few things that weren’t accurate including a) that we had stopped paying for the suite - we never paid for the suite nor did we ever take delivery of the suite or use it at anytime, b) that we had not responded to their correspondence - I was in direct conversations with both the Cowboys and their lawyers up until they filed this suit and c) that the suite was dark during the season - there is LOTS of video proving that the suite was occupied for each game, it was not dark. While this entire affair has left a bad taste in my mouth, I am still a fan of the Cowboys and actually have a lot of admiration for Jerry Jones - I suspect he had no idea what his salespeople were doing to sell his new stadium.
