Since taking over Dignity Delegation, Chet Ubetcha has stepped away from running his business empire. But in Altdorf, a federal judge has handed a legal defeat to the Hot Potato organization that he owns. He ruled that Hot Potato must refund its debtors nearly $48 million, a far cry from the $2.4 billion filed in the initial suit.
It’s a case that began when Ubetcha bought the struggling company. He paid just $5 million, a bargain price. But as part of the deal, he had to assume some of the $60 million in debt, money owed to the Bank of Altdorf who financed the startup
In a letter and a meeting with Hot Potato members, the company told those who wanted out of sponsorship, they would have to continue for the remainder of the season, but many speculate that the affiliate teams will receive no payout.
Disgruntled affiliates say that Ubetcha needs to cover their sponsorship agreement contact. Their lawyer says that Ubetcha plans to cover the debt, but in doing so will cripple the expenses that fuel the largest sponsor in the Blitz league, Dignity Delegation.
In a letter and a meeting with club members, the company told those who wanted out, they would have to continue to pay annual dues but couldn’t use the club. Plus, they wouldn’t receive their refunds until new members were found to replace them, a process that might take years.
In a statement Ubetcha said he disagreed with the judge’s decision and that, “At the time I purchased Hot Potato, it was suffering financially, making it unlikely that these affiliates would ever get any sort of payout.” Ubetcha does not plan to appeal the derision.