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On Monday, Gambling911.com learned that a group of customers planned to take action against Jazz Sports former owner.... in a U.S. court.
That former owner, known as "Barefoot Mike" (last name not public), insisted to Gambling911 on Monday that he sold the company and is not liable for customer debt moving forward.
"The company was sold in August 2024 and in the agreement the new owners accepted the postup liability and that amount was removed from the final price. They also received all amounts owed to Jazz which was well over 500k. The new owners instead choose to collect the funds and not pay the players. They have also chosen to move the company to Buckeye where they arte still operating. The new owners also owe me funds for the transaction and have instead chosen to make threats."
He referenced language in the sales contract where the buyer assumed all responsibility.
"The Seller represents that the Business has an outstanding debt of approximately five million dollars ($5.000.000,00) from player’s balance at Jazz Sports, which will be assumed fully by the Buyer and discounted from the Purchase Price."
The players who plan to file suit claim Mike owed over $1.1 million in taxes to the U.S. and entered into an agreement in 2019 to pay that amount. He made good in 2024.
Our sources provided the following:
1. Parties Involved
“Bare Foot Mike” (Seller)
Lou (Robert) (Buyer/Investor)
Unidentified Co-Investor (Buyer/Investor)
“Jazz Team” (Entity responsible for managing and distributing certain funds)
2. Transaction Overview
“Bare Foot Mike” entered into an agreement to sell Jazz Sports to Lou (Robert) and an additional investor. The terms of the agreement included an initial payment followed by a series of installment payments.
3. Initial Payment and Use of Funds
Mike received the first installment payment as agreed. These funds were used to satisfy his personal tax obligations.
Again, the IRS was made whole in 2024, the year of the sale.
4. Modification / Forbearance of Subsequent Payments
Mike agreed to forgo or defer receipt of subsequent installment payments. This accommodation was made with the understanding that the funds would instead be used by the Jazz Team to satisfy outstanding obligations to certain third parties, described as “wiseguy and sharp players” (creditors).
5. Intended Allocation of Deferred Funds
The deferred installment payments were specifically intended to be directed toward paying off these identified creditors in order to settle outstanding liabilities.
6. Alleged Misallocation of Funds
The Jazz Team did not use the deferred installment payments for their intended purpose. Instead, those funds were reportedly diverted for internal use or personal benefit. As a result, the creditors for whom the funds were designated were not paid.
7. Resulting Issues
- Failure to satisfy agreed-upon creditor payments
- Potential breach of the understanding under which Mike agreed to defer payments
- Possible financial and legal exposure for the parties involved
Our source arrived at the following conclusion:
Based on the information currently available, the situation appears to involve a deviation from the agreed-upon use of funds tied to deferred installment payments. Further documentation and verification are required to fully assess the scope of responsibility and any potential legal implications.
Gambling911.com readers are advised to avoid Jazz Sports like the plague.
- Chris Costigan, Gambling911.com Publisher
