Ex-NFL Player Sues ‘Jerry Maguire’ Agent Leigh Steinberg

04/27/12

A former National Football League player and current coach is suing former super agent Leigh Steinberg in bankruptcy court over unpaid loans.

Chad Morton, a special teams assistant coach for the Green Bay Packers, recently filed a lawsuit to make sure Steinberg’s bankruptcy doesn’t take him off the hook for at least $900,000 that a California court ordered him to pay Morton in 2009.

Steinberg, who’s said to have inspired Cameron Crowe’s “Jerry Maguire,” became Morton’s agent in 2000, when the now-35-year-old began his pro football career with the New Orleans Saints. Several years later, Steinberg and his agency took out a $300,000 loan from Morton. Instead of paying back all of the principal and interest owed, Morton says Steinberg and an associate offered to pay him interest and a 5% stake in a venture to build two sports-themed restaurants in China.

Despite Morton’s reported frustrations with the investment, he extended two more loans totaling $300,000. The player said he threatened to find a new agent if he didn’t get paid, but he says Steinberg told him they wouldn’t repay him if he switched.

Morton sued Steinberg, his agency and others in 2006, which resulted in the legal judgment to which Steinberg agreed and which the ex-player is now asking the U.S. Bankruptcy Court in Santa Ana, Calif., not to discharge.

“The debtor actively participated in the Morton v. Steinberg case, he had a fair and full opportunity to litigate the issues of fraud in the Morton v. Steinberg case, and he voluntarily and knowingly stipulated to the judgment on all counts including fraud, and expressly waived his ability to attack the judgment directly or collaterally,” Morton’s attorney wrote in the suit, which was filed Monday.

Steinberg’s bankruptcy attorney couldn’t immediately be reached for comment Friday.

The type of bankruptcy Steinberg filed for, Chapter 7, allows for the discharge, or release, of certain types of debts. Creditors have several months to object before the discharge is granted. If a debt is related to fraud, which Morton says this is, then a creditor has to ask a judge to make sure it sticks.


[more]