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Three new lawsuits add to WSOF’s legal woes

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Three new lawsuits against the World Series of Fighting allege everything from breach of contract and fiduciary duties to fraudulent inducement and “sexually harassing actions.”

Ray Sefo World Series of Fighting

The World Series of Fighting (WSOF) is often mentioned as the world’s #3 MMA promotion, but it may very well be #1 in terms of dysfunction.

In five short years of existence and four years of putting on events, MMAWC, the company doing business as WSOF, has endured various financial and legal troubles. These include allegations of evading regulators over a “blatant violation” of Nevada Administrative Code 467.104 for Ali Abdelaziz’s alleged role as promotional matchmaker and fighter manager, two claims of failure to pay rent, allegations of defaulted loan payments and last-minute emergency loans to barely avoid cancelling an event, contractual disputes over ownership of WSOF’s content and international licensing rights. There are also claims that Bruce Deifik, the current controlling member, rejected certain financing opportunities “in favor of securing more favorable terms for himself so as to increase his stake and control in [MMAWC]” and allegedly blocked a Board resolution to terminate COO Keith Evans following accusations that Evans overcharged expense reimbursements by almost $20,000 and rebroadcast fight footage for personal profit.

Now, even more charges can be added to the list. Bloody Elbow has obtained three recently filed lawsuits which continue to call into question the ability of the company and its leaders to honor contractual agreements and behave ethically.

On Jun. 30, Ralph Lampman, the brother of WSOF founding member Shawn Lampman (through the ACAK Trust in which Lampman’s mother was the trustee) and current operator of WSOF Latino America, filed suit in Clark County District Court against MMAWC for breach of contract. Ralph Lampman claims he loaned MMAWC $321,000 on Jul. 3, 2012 in exchange for 10% interest, 2% ownership, and “certain licensing rights in Latin America.” Two days earlier, MMAWC had sued Ralph Lampman for a declaratory judgment stating that it does not owe him money, he is not an investor, and has no licensing rights.

On Jul. 7, Arthur LaFond sued MMAWC and Deifik in the same Clark County court. LaFond claims he was to be paid $145,000 for “certain domain names” he owned that MMAWC wanted to acquire. He was also allegedly hired to secure other domain names and serve as MMAWC’s Domain Manager, for which he would receive $25,000 per year, $600 in monthly maintenance expenses, and 1/10th of 1% in ownership interest.

According to LaFond’s complaint, Deifik threatened him with “baseless” lawsuits in an attempt to gain control over wsof.com, the promotion’s website which LaFond claims to have obtained without receiving compensation.

Shawn Lampman’s former girlfriend, Aymet Roman-Perez, filed suit against MMAWC and Deifik on Aug. 5 in Nevada for fraudulent inducement and intentional infliction of emotional distress, among other charges. Roman-Perez was a founding member of MMAWC with a small 2% ownership stake that had been reduced down to 1.5% by May 2015.

Among Roman-Perez’s claims, “When WSOF funding shortfalls occurred WSOF's ‘board’ would execute and unanimously approve resolutions related to raising capital from outside funding sources. These resolutions were ultimately ignored and disregarded by Deifik and instead, Deifik would afford himself the right to provide immediate short-term capital infusions at much more favorable terms to Deifik but to the considerable detriment of WSOF, its members, and [Roman-Perez].”

Roman-Perez alleges that Deifik represented to her “that the WSOF was of little or no value and was likely to go bankrupt” but was “willing to do her a favor” by buying her interest. She also alleges Deifik had projections valuing MMAWC at $300-400 million. “Thus, Deifik duped [Roman-Perez] into selling her units at a price he knew to be undervalued given the projections and financial statements he had prepared.”

But Roman-Perez’s lawsuit only gets stranger from there. According to the complaint, Deifik offered to purchase Roman-Perez’s 1.5% ownership for $70,000, but only if she re-paid Deifik $10,000 – purportedly for charity. The purchase agreement isn’t included in the complaint so it is presently unknown if the purported re-payment was verbally agreed upon or explicitly contracted.

But the form of the alleged payment seems to be a strange one for charity. As stated in the complaint, “Deifik told [Roman-Perez] that to facilitate the payment to charity, she must purchase gift cards at stores such as the Apple Store, Best Buy, and Nordstrom’s. Deifik made it clear to [Roman-Perez] that the deal would not go forward unless she cooperated and purchased the gift cards as instructed and delivered them to Deifik. The majority of the conversations occurred over the telephone, though some conversations occurred through text messaging.”

To make matters worse, Roman-Perez also claims Deifik sent “inappropriate and sexually harassing” text messages demanding nude pictures. The purported text messages included in the complaint do not mention nudity but appear to contain at least seven picture requests, two of which can be seen below.

“Send me another picture please, that was amazing
Amazing!!!
Delicious”

“Full pic of you
One I need
Go in your bedroom and take a picture please”

Some of the other purported text messages included in Roman-Perez’s complaint appear consistent with what we already knew about Deifik. At one point, he allegedly writes, “I have 7.5 million in this company and don’t feel like sinking more in…”

From Bloody Elbow’s reporting last year, we know Deifik made capital contributions and loans to MMAWC totaling $5,055,387 prior to spending $2.2 million in May 2015 to buyout the ACAK trust (of which the trustee was Shawn Lampman’s mother) and $730,000 to buy MMAWC equity and debt from two other members – a total investment of just under $8 million. If MMAWC is consistently bleeding money on every show, as some have speculated, that number would likely be even higher today.

Deifik’s alleged choice of words could also be revealing. Is “don’t feel like sinking more in” the phrasing someone uses when discussing an investment they feel positive about? And if the majority member doesn’t want to sink more money into WSOF, then who will?

As the WSOF veil has been pulled back over the past year, a picture of a fight promotion in turmoil has come into focus. On top of what appears to be a consistent lack of funds, there have been repeated allegations involving the simple inability to honor existing contractual agreements, with the Ralph Lampman and LaFond lawsuits only adding to the list.

The character and decision-making of MMAWC members and executives has been called into question in lawsuits, John Nash’s coverage of Ali Abdelaziz’s apparent role as manager and matchmaker, and Mike Russell’s reporting. Russell’s new article paints a picture of certain WSOF brass who actively protected an apparent conflict of interest and possible violation of Nevada Athletic Commision rules despite the concerns and efforts of some behind the scenes.

And the recent turnover of certain key behind-the-scenes players doesn’t improve the picture of turmoil. Vincent Hesser was made CFO in 2013 only to be removed two years later. Barry Pincus, the CFO announced two months after Hesser’s removal, now seems to have the unusual distinction of two concurrent CFO jobs on his LinkedIn page. A call to verify his current WSOF employment status was not returned. Per Mike Russell, former COO Keith Evans was let go following the RecPlex debacle earlier this year. His replacement, Michael Mersch, lasted just over two months as COO and General Counsel. Longtime PR communications consultant Mike Afromowitz also informed Bloody Elbow last Sunday that he was no longer with the company.

As for the events themselves, WSOF’s television viewership doesn’t give much reason for optimism either (data from MMA Payout). Outside of Justin Gaethje vs. Nick Newell at WSOF 11, the promotion’s viewership numbers have been decidedly flat, or perhaps even declining since Rousimar Palhares poked and cranked Jake Shields into a pissed off submission at WSOF 22 in August 2015. If the promotion is building towards something, its viewership numbers and shows per year don’t seem to be complying.

To top it all off, WSOF brass now ask fans to believe “as that UFC 205 lineup kept building,” they finally came to the decision that having WSOF 34 go head-to-head with the UFC’s Madison Square Garden debut “wasn’t the right choice.” Meanwhile, the UFC has had the Nov. 12 date booked for a “major” pay-per-view event at MSG since April 14. How much knowledge of the fight industry is required to know all the way back in April that the UFC’s first modern New York show, held at the iconic Madison Square Garden, after fighting so long and so hard to get MMA legalized in the state, would be enormous?

As the WSOF’s legal woes continue, the promotional turmoil seems to continue as well, with Ralph Lampman, Arthur LaFond, and Aymet Roman-Perez hoping the money being sunk in doesn’t turn off before they have a chance to collect damages or a negotiate a settlement.

WSOF President Ray Sefo did not respond to a request for comment as of this writing.

Paul is Bloody Elbow’s analytics and business writer. Follow him @MMAanalytics.