(CN) – An investment firm breached its agreement to share profits on ticket sales of the 2002 Mike Tyson-Lennox Lewis fight, the Tennessee Court of Appeals ruled.
Dyer Investment Co. provided financing to guarantee minimum ticket sales from the fight. The firm also found sub-investors to spread the risk or share the profit, based on whether ticket sales reached the minimum.
As tickets were being sold, Dyer did not provide Willie German and the five other plaintiff sub-investors with the information it needed to obtain letters of credit.
Then, when ticket sales surpassed the minimum, Dyer dismissed the sub-investors from their obligations.
German and the other sub-investors sued for their portion of the profits.
The trial court ruled in favor of Dyer, because there was no enforceable contract due to the lack of letters of credit.
Judge Kirby reversed the decision, ruling that an enforceable contract was in place.
“The investment firm had an implied duty to cooperate in the sub-investor’s performance of its contractual promise,” Kirby ruled. “(Dyer) was unjustly enriched by obtaining the safety net of (the sub-investors’) guaranty without the concomitant risk of losing any portion of the profits.”