Nashville Kats seeking $2.5 million and request for expulsion in lawsuit against chairman
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NASHVILLE, Tenn. — The Nashville Kats ownership group filed a lawsuit against its chairman over claims of not receiving payment towards a $2.5 million loan to buy into the franchise.
According to the five page complaint, which was filed on October 18 in the Chancery Court For Davidson County, Tennessee, and obtained Monday by Arena Insider, Nashville Arena Sports (NAS), LLC allege Charles “Chuck” McDowell failed to pay on a signed $2.5 million promissory note which is also known as a loan.
Both groups entered into the agreement on March 13 and was finalized six days later on March 19. At the time, he was announced as the largest individual stakeholder of the franchise with the purchase of the “30,000 Class A Units.”
In the promissory note attached to the suit, McDowell agreed to a repayment schedule beginning on September 15 for $1 million. The next two payments were scheduled for March 15, 2025 and September 15, 2025 for $500,000 and the remaining amount to be paid at a later date.
NAS alleges McDowell missed his first payment which prompted the lawsuit.
“Defendants have refused to pay the amounts due, in whole or in part, to attempt to gain leverage in buyout negotiations with NAS. As a direct and proximate cause of McDowell Ventures, LLC’s breach of the promissory note, NAS has suffered compensatory, consequential, and incidental damages in an amount to be determined at trial.” Lawyers for NAS stated in the complaint.
In addition to the $2.5 million in damages, NAS is also seeking judgement in favor to expel McDowell from the ownership group.
“McDowell Ventures, LLC has engaged in conduct relating to NAS’s business that makes it not reasonably practicable to carry on the business with McDowell Ventures, LLC.”
The case appears to be a setback for the franchise as it enters the first season under the newly formed Arena Football One. Teams are currently in free agency and the Kats have yet to publicly announce any signings according to recent transaction posts on the league website.
“We are monitoring the situation in Nashville and are in communication with the relevant stakeholders involved,” An AF1 representative said in statement to Arena Insider on Tuesday. “Commissioner Fisher is dedicated to keeping arena football available to all our fans and we continue to build towards our 2025 premiere season and are meticulously preparing for it.”
This remains a developing story and this post will be updated with more details as it becomes available.
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[…] During the schedule release show, Commissioner Jeff Fisher addressed the ongoing situation with the Nashville Kats, and confirmed the team will be around as it deals with legal issues surrounding the ownership group. […]