lawsuit -

1/29/2015 5:10:17 PM
Donna Kay McKinney
Bexar County District Clerk
Accepted By: Maria Abilez
TIM DUNCAN ("Duncan") files this Plaintiffs Original Petition complaining of
CHARLES BANKS ("Banlcs") showing as follows:
This is a case to recover monies Duncan lost while and after he was betrayed by Banks
who committed egregious breaches of his trust relationship with Duncan - breaches driven and
fueled by self-interest, self-dealing and greed to Duncan's substantial detriment and damage.
Duncan intends to have discovery conducted under a Level 3 Discovery Control Plan as
more fully set out in Texas Rule of Civil Procedure 190.4.
Duncan is an individual residing in San Antonio, Bexar County, Texas.
Banks is an individual who Plaintiff believes resides in Atlanta, Georgia.
The subject matter of this lawsuit is within this Court's jurisdiction. Pursuant to Texas
Rule of Civil Procedure 47(c)(5), Duncan states that he seeks monetary relief over One Million
Dollars ($1,000,000.00). Duncan also seeks judgment for all other relief to which he is entitled.
Banks is subject to this Court's jurisdiction because the fiduciary relationship in question
arose in Texas and because he has conducted business, including but not limited to the
transaction or transactions at issue in this lawsuit, within Texas. Venue is proper in this court
because all or a substantial part of the events or omissions giving rise to this lawsuit occurred in
Bexar County, Texas.
Duncan is a professional athlete. Over the years he has had substantial success in his
field both professionally and financially. However, recognizing that an athlete's earning years
are relatively limited, Duncan wanted to invest his earnings prudently and wisely in order to
ensure a secure future for his family and provide for his ability to contribute to his community.
Duncan met Banks during his rookie year - in approximately 1998 - while Banks was
employed in the sports industry as an executive. Banks used his position as a sports industry
executive to promote himself to Duncan as being a sophisticated businessman with numerous
trust relationships with other athletes and sports executives. Over time and relying upon Banks'
many representations, Duncan began to trust Banks and to consider him a personal and financial
Banks ultimately decided to leave his position in the sports field and strike out as a
professional financial advisor and independent businessman. Duncan, again relying upon Banks'
representations, retained Banks as his advisor.
Based upon Banks' advice, counsel and
recommendations, Duncan entered into several investments initiated at the instance of Banks.
These investments were in a wide array of industries including the hotel, beauty products, sports
merchandise and wine industries.
One of these investments was a "Note and Warrant Purchase Agreement" with Gameday
Entertainment, LLC ("Gameday Note" and "Gameday") in the face value of Seven Million Five
Hundred Thousand Dollars ($7,500,000.00). Duncan was persuaded after solicitation by Banks
to make such a loan to Gameday. The Gameday Note to Duncan was to be a superior note that
was not subordinated to any other Gameday indebtedness. Further, Duncan was not asked and
did not guarantee any indebtedness of Gameday. Payments on the note were to be made with no
provisions for deductions for advisory or any other fees.
Banks, upon information and belief and at all pertinent times, was acting as Chairman of
Gameday or one of its parents or affiliates while acting as Duncan's financial and personal
advisor. Despite the absence of provisions in the Gameday Note and using his position, Banks
instructed Gameday to withhold twenty percent (20%) of the amounts due Duncan under the
Gameday Note as Banks' "fee."
However, Banks did not, and does not, have any written
authorization from Duncan allowing such withholding.
Unfortunately, while Banks was willing to use his position with Gameday to secure
payments for himself, he was not willing to ensure ·that Duncan's interests were protected. He
failed to advise Duncan that other parties held security interests in Gameday that may talce
priority over Duncan's interests. He intentionally or negligently failed to ensure that Duncan's
security interest was promptly recorded. He instructed or allowed Gameday to record Duncan's
interest as "equity" rather than "debt" on its balance sheet. And he failed to advise Duncan that
Gameday may not be able to timely make the payments due under the Gameday Note.
Gameday did make some payments on the Gameday Note. However, Gameday failed to
make all payments by either missing some payments or paying less than the amount otherwise
due when it did make payments. Nonetheless, Gameday was always able to withhold twenty
percent (20%) of its payments which, upon information and belief, was immediately paid to
Banks. Duncan ultimately learned that he was not being paid his full entitlement under the
Gameday Note. He confronted both Gameday and Banks who stated that Gameday was unable
to immediately bring the Gameday Note current because of its current business situation. But,
when confronted about the amounts withheld at Banks' instruction and for Banks' sole benefit,
they stated that they would not return the wrongfully withheld payments to Duncan unless he
executed an affidavit stating that Banks was not his financial or personal advisor and that
Duncan fully and finally released Banks. This position by Gameday and Banks is baffling given
that they contend that Duncan had "verbally authorized" the withholdings as "Banks' fee."
Duncan has also since learned that Gameday, under the direction and leadership of
Banks, entered into certain loan agreements with Comerica Bank in late June 2013 in an amount
of at least Six Millions Dollars ($6,000,000.00) ("The Comerica Note"). More astonishing to
Duncan is that Comerica Bank claimed that they possessed a Guaranty purportedly signed by
Duncan in which Duncan guarantees Gameday's payment of the loan amounts to Comerica.
Further, Comerica claimed that they also possessed a Subordination and Intercreditor
Agreement - again purportedly signed by Duncan - in which Duncan agreed that his Gameday
Note is "subordinate, junior and subject in right of payment" to The Comerica Note.
Duncan did not sign either the Guaranty or the Subordination and Intercreditor
Agreement nor did he authorize anyone to do so on his behalf. Despite numerous demands to
both Comerica Bank, Gameday and Banks to view the originals of the Guaranty and the
Subordination and Intercreditor Agreement, the originals have yet to be located or produced by
either Comerica Bank, Gameday or Banks.
Duncan's signatures on the Guaranty and the
Subordination and Intercreditor Agreement are forgeries.
Additionally, Duncan was not paid any consideration for the Guaranty and the
Subordination and Intercreditor Agreement.
However, guarantee payments believed to be
substantial have been paid to an entity of which Banks is a one-third (1/3) owner and managing
partner. The entity is Hammer Holdings.
Banks also encouraged, promoted, hustled and advised Duncan to invest in several
wineries and investment funds that he controls. Banks has used these wineries and funds to
secure substantial income for himself, but they have yet to return much, if anything, to Duncan.
Needless to say, Duncan would not have invested his family's financial future in these wineries
and funds if Banks had advised him that they would be operated for Banks' benefit and to the
detriment of Duncan and the other investors. More troubling is the fact that Banks advised
Duncan to make these investments knowing that (1) Duncan was relying on him to protect his
investment and steer him toward prudent investments, and (2) Banks fully intended to operate
these wineries and funds (which were operated with substantial amounts of his client's money)
for his own personal benefit thus creating a clear conflict of interest.
Banks undertook efforts designed to minimize any chance of Duncan discovering his
damages or even facts that might place Duncan on notice that there might be issues deserving
further investigation.
It was not until early 2014 that Duncan first realized that there might be issues with the
manner in which Banks advised him and handled his investments. Specifically, Duncan needed
to account for his assets because of a family law proceeding and asked Banks, Gameday and the
various wineries and funds to cooperate with his attorneys and financial professionals in
gathering this information. Far from cooperating as would be expected from a client's advisor
and those managing an investor's funds, each of these entities (all of which Banks controls or
strongly influences) refused to make full disclosure of financial statements or other documents
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and refused to cooperate with reasonable requests for information. When details were eventually
uncovered showing improprieties or money owing but diverted, they refused to turnover such
funds without Duncan releasing his rights and stating, falsely, that Banks was not his advisor.
Ultimately Duncan has had to make the hard choice to file this lawsuit in order to both
protect his rights and to discourage Banks from taking similar advantage of others in the future.
Breach ofFiduciary Duty
Duncan incorporates the factual allegations set forth in paragraphs 7 through 20 by
reference as if set forth verbatim.
Banks held a formal fiduciary relationship with Duncan by virtue of his status as
Duncan's securities broker and financial advisor. Additionally or alternatively, Banks held an
informal fiduciary relationship with Duncan by virtue of his longstanding status as a personal
and financial advisor and confidant to Duncan and by virtue of the fact that he knew or
reasonably should have known that Duncan was relying on him in matters related to his financial
Whether formal, informal or both, Banks' fiduciary relationship with Duncan
extended to all matters involving the Gameday Note, the purported Guaranty and/or
Subordination and Intercreditor Agreement and the winery and fund investments at issue in this
As a fiduciary, Banks owed Duncan multiple duties, including:
The duty of loyalty and utmost good faith;
The duty of candor;
The duty to refrain from self-dealing;
The duty to act with the highest integrity;
The duty of fair and honest dealing; and,
The duty of full disclosure.
Banks breached these duties by placing his own interests above those of Duncan, by
failing to fully, fairly, and honestly disclose the nature of the various investments that he
encouraged and advised Duncan to make and by otherwise engaging in self-dealing to his benefit
and Duncan's detriment.
Duncan has suffered damages as a direct and proximate result of Banks' breach of his
fiduciary duty and Duncan will continue to suffer damages into the future. Duncan is entitled to
recover the damages resulting from this breach. Duncan is also entitled to the imposition of a
constructive trust on the proceeds, funds, or property obtained as a result of Banks' breach of his
fiduciary duty to Duncan.
Banks intended to gain benefits to which he was not entitled making his breach of his
fiduciary duty to Duncan intentional and entitling Duncan to exemplary damages.
Money Had and Received/Accounting
Duncan incorporates the factual allegations set forth in paragraphs 7 through 20 by
reference as if set forth verbatim.
Banks holds money that, in all equity and good conscience, belongs to Duncan. More
specifically, and upon information and belief, certain payments or portions of payments from
Gameday under the Garneday Note were diverted and paid to Banks. Banks should be ordered
to account for and return these funds to Duncan and an injunction should issue compelling him to
do so.
Banks acted with fraud or malice to secure these payments for himself.
Duncan is entitled to exemplary damages.
Potential Declaratory Judgment
In the event Comerica Bank does not acknowledge that the Guaranty and the
Subordination and Intercreditor Agreement are unenforceable as to Duncan and will not be
enforced but rather are considered null and void, Duncan will join Comerica Bank to this action.
Duncan will seek a declaration that the Guaranty and the Subordination and Intercreditor
Agreement are unenforceable and should be declared null and void.
Pursuant to Rule 194 of the Texas Rules of Civil Procedure, Plaintiff hereby requests that
Defendant disclose, within fifty (50) days of service of this petition and request, the information
or material described in Rule 194.2(a) through (k) of the Texas Rules of Civil Procedure.
WHEREFORE, PREMISES CONSIDERED, Duncan asks this Court to set this matter
for hearing and, upon final hearing, award him his actual damages, exemplary damages, costs,
and such other and further relief to which he is justly entitled (including prejudgment and postjudgment interest at the maximum legal rate and as provided by law) at law and/or equity.
Duncan also seeks injunctive relief. Duncan also, pursuant to Texas Rule of Civil Procedure
47( d), hereby demands judgment for all the other relief to which he deems himself entitled.
Respectfully submitted,
300 Convent Street, Suite 1500
San Antonio, Texas 78205
Telephone: (210) 226 1166
Facsimile: (800) 40 970
[email protected]
Michael D. Bernard
State Bar No. 02211310
[email protected]