“Bo Knows” Business Law

Sports star-turned-businessman Bo Jackson won a preliminary injunction against a business partner who allegedly lined her pockets with millions in corporate earnings. The former two-sport athlete and star of one of Nike’s most famous ad campaigns became suspicious after he was not allowed to review the company’s financial records, filing a lawsuit in 2009. What his team discovered made $16 muffins seem reasonable.

Jackson rose to fame as a Heisman Trophy-winning running back at Auburn University. The first pick in the 1986 NFL Draft, he defied the odds by competing as a professional athlete in both the NFL and Major League Baseball, playing for the Oakland Raiders and Kansas City Royals. His versatility impressed the sporting public and his digital abilities as “Video Bo” made him a video game legend, but it was Nike’s “Bo Knows” commercials that catapulted him into the pop culture lexicon. A combination of injuries and a desire to settle down with his family led to his decision to retire early from both sports and dive into a career as a businessman. Through his business dealings he became a partner in food-products distribution company N’Genuity Enterprises, lending his celebrity to boost sales.

After filing his case against his N’Genuity partner, Valerie Littlechief, Jackson hired a fraud investigator. The investigator found evidence that appeared to corroborate Jackson’s allegations that Littlechief was looting the company of millions of dollars through payments to related corporations and transfers to herself disguised as business expenses. Littlechief claimed she was simply borrowing money from the company and paying it back without interest, and that any other inconsistencies resulted from bookkeeping errors. At the time, N’Genuity was contemplating a merger with a company owned by Littlechief’s relatives.

U.S. Magistrate Judge Jeffrey Cole sided with Jackson, finding it highly unlikely that the “pattern of disguised transactions, always in favor of Ms. Littlechief and her family” could be the result of accounting mistakes. The judge observed that Littlechief’s personal loans were usually “recorded not as loans but as cost of goods sold and not properly classified until after the litigation began.” The court cited an example of an accounting entry originally entered as a nearly $250,000 loan to Littlechief: “Somehow, with a few strokes of a keyboard, this quarter-million-dollar receivable was ‘reclassified’ as ‘cost of chicken wings.'” He found that Littlechief’s claim that she tried to segregate her funds and was blameless for erros “hovers on the brink of the preposterous.” Judge Cole granted Jackson’s request for a preliminary injunction to prevent the merger and for a temporary receiver.


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