Bloomberg News

Armstrong Sued by Promoter for $12 Million Tour Bonuses

February 08, 2013

Armstrong Gear Goes on Sale as Doping Destroys Brand’s Value

Lance Armstrong in New York in this file photo. Photographer: Beatrice de Gea/The New York Times via Redux

Lance Armstrong, who was stripped of his record seven Tour de France titles for doping, now faces a lawsuit seeking the return of $12 million in prize money a promoter paid the cyclist for three of those championships.

SCA Promotions Inc. paid Armstrong the bonuses after he won the 2002, 2003 and 2004 bicycle races, believing his representations that he had won each contest fairly, according to a complaint filed yesterday in a Dallas court. SCA is suing to get the money back.

Armstrong, 41, last month told Oprah Winfrey in a televised interview that he had doped during his racing career. He previously denied doing so under oath, according to SCA’s complaint.

“Mr. Armstrong stopped at nothing to maintain this fiction,” SCA alleged. “His perjury went well beyond simply denying that he used performance enhancing drugs. Instead he lied aggressively, repeatedly and without remorse under oath in an effort to create the aura that he was a clean rider.”

SCA contends it wouldn’t have been obligated to pay Armstrong had it known the truth. The company provides event risk coverage for competitions such as hole-in-one contests, half-court shot promotions and radio station giveaways.

Court Order

The Dallas-based business is seeking a court order directing the cyclist and his management company, Tailwind Sports Inc., to disgorge the funds.

Armstrong had sued SCA after it balked at paying him $5 million for winning the 2004 race. It had already paid him $1.2 million for his victory in 2002 and $3 million after the 2003 tour, according to the complaint.

The matter went to arbitration during which the cyclist swore under oath that he’d never cheated, according to the SCA filing.

The parties later settled the dispute in exchange for a $5 million payment plus $2.5 million in interest, at which time, Armstrong attorney Mark Fabiani said yesterday, settlement papers were signed barring SCA from raising the issue again.

‘Not Be Clearer’

“Our view is that the language of the agreement could not be clearer,” Fabiani said in an e-mailed message. “SCA decided to settle this case, and the agreement SCA signed prohibits SCA from ever revisiting this matter.”

A copy of that document provided by Fabiani, signed by the parties on Feb. 8, 2006, states, “no party may challenge, appeal or attempt to set aside,” what they’d agreed was an arbitration award.

SCA disputes that outcome in yesterday’s court filing.

“The fraudulent acts undertaken by defendants nonetheless resulted in an arbitration process, award and settlement, that was procured by extrinsic fraud,” the company alleged.

Armstrong and Tailwind also agreed they’d have no right to keep the money if the cyclist was stripped of the tour victories, according to SCA’s filing.

SCA filed the suit “to start the process of forcing Mr. Armstrong to deal with the consequences of his actions,” company lawyer Jeff Tillotson, of Dallas’ Lynn Tillotson Pinker Cox LLP, said in an e-mail. “I know he has publicly apologized for lying and, while apologies are nice, ours needs to come with a check.”

The case is SCA Promotions Inc. v. Armstrong, DC13-01564, District Court of Dallas County, Texas, 116th Judicial District.

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at

aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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