Sports Agent Still Can?t Show Creditors the Money

The burning question creditors have for former sports agent Elbert Crawford III is, “What happened to the nearly $2 million he borrowed in 1998 and 1999?”

“I haven’t gotten to the bottom of it yet. We’re still in the investigation phase,” said Richard Ramsey, who is the trustee for Crawford’s company, Ace Sports Management of Little Rock, which was forced into bankruptcy in September 2000.

“But it appears that there are several [of] what under bankruptcy terminology would be considered a preference or fraudulent transfer, where the money went out but could be brought back into the estate.”

Ramsey said he wouldn’t offer specifics until the investigation is complete.

Crawford’s telephone number is unlisted, and he couldn’t be reached for comment.

Crawford, of Little Rock, used his contract to represent Los Angeles Lakers guard Derek Fisher as his primary collateral on $1.92 million worth of loans from four banks and a Russellville woman.

Fisher owed Crawford at least $600,000 for representing him, but the fee could be as high as $840,000 if Fisher stays with the Lakers through the 2005-2006 season.

The banks, however, received bad news from U.S. Bankruptcy Court Judge James Mixon on Nov. 28, when he announced that Fisher could offset nearly $400,000 plus another $95,000 in attorney’s fees toward the $600,000 he owed Crawford.

The judge also released the pecking order of the banks for the remaining funds:

• Merchants & Planters Bank in Sparkman was first in line and was owed $171,693;

n Union Bank of Bryant was second with a claim of $451,451; and

• National Bank of Arkansas in North Little Rock was third with a claim of $647,032.

Mixon delivered more bad news to River Valley Bank in Russellville, which claimed $288,893, and Bonnie Johnson of Russellville, the wife of a River Valley Bank director who claimed $370,161. Mixon said they have no security interest in Crawford’s contract with Fisher, although they thought they had one.

Union Bank of Bryant on Feb. 5 appealed Mixon’s decision on the amount of the contract Fisher could offset.

Merchants & Planters Bank

Although all four banks claimed to have an interest in Fisher’s contract with Crawford, M&P was the first to properly file it, Mixon said.

On Sept. 25, 1998, M&P issued a promissory note for $150,000 to Ace, Crawford and his wife, Andreia Crawford.

Several items of collateral were described in the security agreement, including the contract involving Fisher dated March 28, 1996; Fisher’s first contract with Crawford that expired in 1999; and “subsequent agreements made thereto.”

M&P said the phrase “subsequent agreements made thereto” should reasonably be interpreted as referring to subsequent agreements between Fisher and Crawford. The court agreed.

“Although perhaps not stated as precisely as possible, the phrase ‘and subsequent agreements thereto’ certainly indicates a reference to something more than the 1996 contract,” Mixon said. “Therefore, M&P perfected a security interest in the 1999 contract between Fisher and Crawford on Sept. 30, 1998.”

Union Bank

Crawford himself executed a loan with Union Bank on April 13, 1999. The collateral was described as Crawford’s interest in “all the debtor’s present and future accounts, all additional amounts due to the debtor from any customer or client, irrespective of whether such additional amounts have been specifically assigned to the secured party …”

Crawford also signed an identical document on behalf of Ace Sports Management LLC on the same date.

Also on April 13, four financing statements were prepared by Union Bank and submitted to Crawford for signature. Two of the financing statements listed Ace Sports Management LLC as the debtor and were signed, “Ace Sports Management LLC by Elbert Crawford III, president.”

Those financial statements were filed of record on April 12, 1999, with the secretary of state and the circuit clerk of Pulaski County.

“Therefore, Union Bank perfected its security interest in the 1999 contract on April 13, 1999,” Mixon said.

National Bank of Arkansas

In connection with a loan from National Bank of Arkansas, Crawford signed a security agreement on Feb. 27, 1998. The collateral included Crawford’s accounts and other future rights to payment. The security interest granted by Crawford was never perfected through a properly filed financing statement, Mixon said.

Therefore, NBA did not perfect its security interest in the 1999 Fisher-Crawford contract until May 1999 when it filed a financing statement with a statement describing the 1999 contract as collateral as required, Mixon ruled.

River Valley

River Valley said it claimed a perfected security interest in the 1999 contract between Fisher and Crawford on July 28, 1998.

But the other banks argued against River Valley’s claim because the security agreements were executed by Crawford on behalf of Ace, which had no interest in the contract between Fisher and Crawford.

“The evidence … supports the inference that River Valley either misunderstood or overlooked the requirements … with regard to attachment of a security interest where the collateral is owned by someone other than the maker of the note,” Mixon said.

Mixon ruled River Valley didn’t have a security interest in the 1999 player/agent contract between Crawford and Fisher. And even if River Valley effectively had obtained a security interest in the 1999 Fisher-Crawford contract, it did not file a proper financing statement, Mixon said.

Mixon also ruled that Bonnie Johnson was an unsecured creditor because she didn’t produced any evidence to show that she had a security interest in the contract.

Although the bankruptcy record doesn’t explain where the money went, it does illustrate how Crawford bounced from creditor to creditor looking for cash.

In April 1999, Johnson, whose husband Jim Johnson was on the board of directors of River Valley Bank, said bank President James Biggers told her Crawford needed a short-term loan.

She took out a loan for $300,000 from the bank and gave it to Crawford. She said she thought it would be paid off in four months, but he never made a payment.

Johnson, who claimed net worth of about $5 million, said she repaid River Valley out of her own pocket.

When asked in a deposition why the bank did not make the loan directly to Crawford, Biggers said, “[W]e just felt it was time that we needed to back off.”

River Valley already had lent Crawford $288,893.

In the summer of 1999, Crawford scored the biggest deal of his sports-agent career: The Lakers resigned Fisher for seven years for $21 million.

Crawford’s share for representing Fisher was $120,000 a year during the life of the Lakers contract. But even with that revenue and the $300,000 loan from Johnson, Crawford said he was under financial strain.

On Aug. 21, 1999, Fisher advanced Crawford his first season’s pay almost a year early.

“Elbert said it would help him out,” Fisher said in his deposition. “That would really allow him to do some things at the office if I could do that.”

But it didn’t satisfy Crawford’s need for cash.

“We were getting 10 phone calls a day from different banks,” Crawford said in his deposition.

His only hope was Fisher again. Crawford flew to Los Angles and tried to get financial help.

“[Crawford said] the banks in Arkansas had kind of turned their back on him …,” Fisher said. “It was really hard for him to get his hands on the money.”

Fisher arranged a meeting with Crawford and Barry Garipedian, Fisher’s financial adviser at Salomon Smith Barney in Los Angeles, to see if there was anything he could do.

“Ace Sports was under pressure by all of the banks to get the notes up to date,” Crawford said in the deposition.

In August 1999, Crawford wanted to consolidate the nearly $2 million he had in outstanding loans and hoped that Garipedian could direct him to a bank that would loan him more money.

“That would allow us to proceed forward and sign new clients and take care of all of our obligations,” Crawford said.

Garipedian found a bank, but the loan was going to take weeks to process and Crawford couldn’t wait that long. In November 1999, Crawford, who was in Los Angles attending a Lakers’ game, told Fisher about the financial situation at Ace.

Fisher gave him a check for $22,500 as another advance on his agent fees.

“This check was written in order for Ace Sports to make payroll,” Crawford said. “And bills that were due. It was made in advance to us to keep us afloat.”

It was also during Crawford’s trip to California that Garipedian told Fisher about an express loan that could be used for Crawford. At first, Fisher agreed, but he had some reservations.

He didn’t want to be tied to Crawford’s debt and asked to be contacted before any transaction was made. After Fisher signed the paperwork, Crawford took a red-eye flight back to Little Rock. The next morning, on Nov. 18, 1999, Crawford faxed Garipedian the account numbers to which he wanted the $180,000 to be transferred. Garipedian wired the money without Fisher’s approval. Once the money hit Crawford’s account, $130,000 went to National Bank of Arkansas and $50,000 went to the River Valley for interest and a bit of principle.

“[I] also paid bills that were due, so all of it would have been for operating expenses,” Crawford said. He also said none of the money was used for personal expenses.

When Fisher learned that the money was wired without his approval, he ended his relationship with Crawford.

“Although I hold no animosity or ill feelings, I believe that you have used bad judgment and made poor business decisions that have affected me personally and financially,” Fisher said in a Dec. 22, 1999, letter to Crawford.

In the following months, several of the banks filed lawsuits against Crawford and Ace for defaulting on loans.

On Aug. 8, 2000, Crawford’s main creditors grouped together and filed an involuntary bankruptcy petition against both Crawford individually and Ace.