San Antonio, Texas, November 29, 2025

In a significant ruling, a bankruptcy judge in San Antonio cleared Dundon Capital Partners and its executives of $180 million in debt linked to the bankruptcy of the Alliance of American Football. The judge dismissed claims of breach of contract and fraud, highlighting the bankruptcy trustee’s failure to provide sufficient evidence. The court did find some self-dealing conduct by Dundon, awarding $1 for that situation. This case reflects the complexities of proving legal claims in bankruptcy contexts.

San Antonio, Texas

Bankruptcy Judge Clears Dallas Investor of $180 Million Debt in Alliance of American Football Case

A bankruptcy judge in San Antonio has ruled that Dallas-based investment firm Dundon Capital Partners (DCP) and its executives, Tom Dundon and John Zutter, are not liable for $180 million in debt related to the bankruptcy of the Alliance of American Football (AAF). The court dismissed claims of breach of contract, fraud, and breach of fiduciary duty against DCP, stating that the bankruptcy trustee failed to provide sufficient evidence to support these allegations. However, the judge did find that Dundon engaged in self-dealing by offering free or discounted advertising during AAF games to certain advertisers, awarding $1 in damages for this conduct.

Background of the Case

The AAF, a professional football league, filed for Chapter 7 bankruptcy in April 2019 after ceasing operations during its inaugural season. The bankruptcy trustee, Randolph Osherow, filed a lawsuit against DCP, alleging that Dundon had orally agreed to invest $250 million into the league but only provided $70 million, leading to the league’s collapse. Dundon and his company denied these allegations, asserting that they fulfilled their financial commitments and that the league’s failure was due to pre-existing liabilities and operational challenges.

Legal Proceedings and Court’s Findings

During the trial, which concluded in June 2025, the court examined extensive evidence, including testimonies and financial records. The judge concluded that while Dundon mentioned the $250 million figure in media communications, there was insufficient evidence to establish that a formal agreement for that amount existed between Dundon and AAF founder Charlie Ebersol. The court also noted that Dundon’s statements about the investment were more aligned with marketing efforts rather than contractual commitments. Regarding the self-dealing claim, the judge acknowledged that Dundon provided free or discounted advertising to certain companies but determined that the bankruptcy trustee did not prove any direct financial harm resulting from this conduct, resulting in a nominal $1 award in damages.

Implications of the Ruling

This ruling effectively absolves Dundon Capital Partners and its executives from the substantial debt associated with the AAF’s bankruptcy. The court’s decision highlights the challenges in proving breach of contract and fraud claims in complex bankruptcy cases, especially when oral agreements and marketing statements are involved. The nominal damages awarded for self-dealing indicate that while the court recognized improper conduct, it did not find it to have caused significant financial harm to the league’s creditors.

About Dundon Capital Partners and the AAF

Dundon Capital Partners is a Dallas-based investment firm led by Tom Dundon, who is also the majority owner of the NHL’s Carolina Hurricanes. In February 2019, Dundon became involved with the AAF, initially investing $70 million and later assuming control of the league. The AAF aimed to provide an alternative professional football league but faced financial difficulties, leading to its abrupt shutdown and subsequent bankruptcy filing in April 2019.

Related Legal Actions

Following the AAF’s bankruptcy, Dundon filed a lawsuit against Charlie Ebersol, alleging that Ebersol misled him about the league’s financial stability. Ebersol, in turn, filed a lawsuit against Dundon, seeking damages related to the league’s collapse. These legal actions underscore the complexities and disputes that can arise when professional sports ventures face financial challenges and bankruptcy proceedings.

Conclusion

The San Antonio bankruptcy judge’s ruling in favor of Dundon Capital Partners and its executives marks a significant development in the legal aftermath of the AAF’s bankruptcy. While the court found evidence of self-dealing, it determined that the bankruptcy trustee failed to prove substantial financial harm, resulting in minimal damages. This case serves as a reminder of the intricate legal and financial issues that can emerge in the wake of a professional sports league’s failure.

FAQ

What was the Alliance of American Football (AAF)?

The AAF was a professional football league that launched in February 2019 but ceased operations and filed for Chapter 7 bankruptcy in April 2019.

Who is Tom Dundon?

Tom Dundon is the majority owner of the NHL’s Carolina Hurricanes and the chairman of Dundon Capital Partners, a Dallas-based investment firm.

What was the nature of the lawsuit against Dundon Capital Partners?

The bankruptcy trustee alleged that Dundon Capital Partners failed to honor an oral agreement to invest $250 million into the AAF, leading to the league’s collapse.

What did the court conclude regarding the $250 million investment claim?

The court found insufficient evidence to establish that a formal agreement for a $250 million investment existed between Dundon and AAF founder Charlie Ebersol.

What were the damages awarded in the case?

The court awarded $1 in damages for self-dealing related to free or discounted advertising provided by Dundon to certain companies during AAF games.

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Author: STAFF HERE DALLAS WRITER

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