Ex-NFL star Shawne Merriman loses control of MMA company, legal battle ensues

Former NFL prima Shawne Merriman founded Lights Out Xtreme Fighting successful April 2019 with hopes of gathering a mixed martial arts marque that differentiates from planetary companies similar UFC, Bellator and the like.

Lights Out made strides successful doing conscionable that. The institution utilized innovative AI exertion to bring much advertizing possibilities to their bouts and signed a organisation rights woody with ESPN to broadcast successful Latin American countries.

On Jan. 8, everything changed.

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Shawne Merriman, erstwhile NFL and Maryland Terrapins linebacker, is recognized connected the tribunal for his foundation Lights On Foundation's during the 2nd fractional of the crippled against the George Washington Colonials astatine Xfinity Center connected Nov. 11, 2021. (Tommy Gilligan/USA TODAY Sports)

Lights Out Sports announced that Applied Real Intelligence (ARI), which is described arsenic a "leading alternate concern steadfast and supplier of maturation superior to North American innovators," acquired a "majority involvement successful the company."

A property merchandise astatine the clip said Lights Out Sports "appointed Dr. Zack Ellison arsenic Chairman of the Board, President, and Chief Executive Officer, effectual immediately" and that Ellison would "next signifier of growth, with work for strategy, governance, superior allocation, and execution."

"Assets don't standard themselves. Leadership does," Ellison said successful the release. "There's a immense accidental astatine Lights Out to turn the level crossed unrecorded events, streaming TV, and partnerships to make durable endeavor value."

Merriman told Fox News Digital the announcement came arsenic a astonishment to him.

"It was instant. I was virtually being removed from the committee and conscionable got beardown armed," Merriman said. "Like I said, we had each volition of making things right, that conscionable wasn’t adjacent an option. This is unnecessary and adjacent arsenic I’m speaking to you today, we’re looking for a solution and we got the capabilities for a solution but it’s not an option. I get it, we got immoderate signed paperwork that whitethorn let them to bash immoderate things, but not this. It’s conscionable unfortunate. Every day, I’m conscionable reasoning astir my squad and unit and the fighters."

Merriman said the contented betwixt the 2 companies stemmed implicit a indebtedness from ARI. A suit was filed against ARI Agent, LLC and ARI Senior Secured Growth connected Jan. 26.

Lights Out secured an statement to get $2.1 cardinal successful May 2024 and missed 3 involvement payments betwixt October and December 2025, totaling astir $50,000, according to tribunal documents filed successful Nevada. The tribunal filing said "the indebtedness was secured by company’s assets including intelligence property" but ARI didn’t person "management oregon ownership rights" successful Lights Out.

Shawne Merriman is the laminitis of Lights Out Xtreme Fighting and Lights Out Sports TV. (Robert Hanashiro, USAT, USA TODAY via Imagn Content Services, LLC)

Merriman’s lawyer said successful a tribunal filing the indebtedness statement preserved Lights Out and Merriman’s "equity ownership and voting rights and contemplates secured-lender remedies." The filing said ARI "issued a announcement purporting to workout default remedies nether the Loan Agreement and, simultaneously, invoked proxy and attorney-in-fact provisions" connected Jan. 2.

The filing said that ARI allegedly removed Merriman from the board, changed the company’s incorporation, "installed" Ellison arsenic the manager of the committee and "paved the way for equity conversion and dilution."

The erstwhile NFL star’s representatives argued that the "proxy and attorney-in-fact provisions successful the Loan Agreement are information devices intended to support collateral value, not grants of managerial authorization oregon ownership rights" and "does not authorize Defendants to run the Company, enactment arsenic officers, displace management, oregon due governance absent lawful foreclosure oregon tribunal supervision."

Merriman sought to person it declared that ARI was not the manager of Lights Out and it had nary valid crushed to cancel fights oregon extremity contracts with vendors arsenic good arsenic sought lawyer fees and tribunal costs.

ARI’s lawyer filed a question to region the lawsuit from the District Court of Clark County to U.S. District Court for the District of Nevada owed to the diverseness successful citizenship of the plaintiff and suspect and the contention astatine manus exceeded a worth of $75,000.

On Feb. 17, Chief U.S. District Judge Andrew P. Gordon granted ARI its question for the lawsuit to beryllium remanded to authorities court. He said successful his determination that ARI indispensable respond to Lights Out’s petition to wage their lawyer fees, which sparked caller filings betwixt the 2 sides connected Monday.

In betwixt the determination and the caller filings, Lights Out said successful a quality merchandise connected Feb. 20 a Temporary Restraining Order (TRO) successful national court.

"I’m hoping to wage the wealth backmost similar we intended to bash and determination connected and get started immediately," Merriman told Fox News Digital. "That’s what I’m hoping for. I’m not a idiosyncratic that wants to combat due to the fact that warring is clip and wealth and it besides affects a batch of people. I’ve got unit that person had opportunities to spell different places for much wealth and they didn’t due to the fact that they believed successful me. They believed successful what I was building. It’s conscionable unfortunate that truthful galore radical are affected by this."

Shawne Merriman attends Michael Rubin's Fanatics Super Bowl enactment astatine the Marquee Nightclub astatine The Cosmopolitan of Las Vegas connected February 10, 2024 successful Las Vegas, Nevada. (Ethan Miller/Getty Images)

ARI’s attorneys filed a effect to Merriman’s TRO petition connected Wednesday, saying that the lawsuit didn’t impact a "wrongful takeover" of a institution but alternatively progressive "distressed borrowers" successful Lights Out XF and Lights Out Enterprises. The tribunal filing said ARI "voluntarily and knowingly executed guaranties and warrants that gave A.R.I. governance rights implicit the Company."

If Merriman defaulted connected the loan, ARI said successful its tribunal filing that it allowed ARI to "exercise each voting, corporate, and different rights’ arsenic if it were the implicit owner."

ARI’s attorneys added that the institution lawfully exercised power of the institution "pursuant to default-triggered proxies and thereafter became the bulk proprietor done the workout of the antecedently granted warrant rights."

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"Ultimately, this lawsuit is astir whether Merriman, a borrower who admitted default and contractually surrendered power of a company, whitethorn usage exigency alleviation to undo the consequences of his ain agreements," the filing read. "Under settled principals of declaration enforcement and equitable relief, helium whitethorn not. Merriman’s Application for Temporary Restraining Order and Motion for Preliminary Injunction should beryllium denied."

A determination could travel arsenic aboriginal arsenic Friday.

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