On November 22, 2024, NFL star Baker Mayfield, his wife Emily Mayfield, and their business entity Team BRM, LLC (collectively, “Plaintiffs”), filed a lawsuit in the United States District Court, Western District of Texas, against several businesses owned or operated by Baker’s father and brother. The Complaint asserts claims for breach of contract against Camwood Capital Management Group, LLC (Camwood Capital), Texas Contract Manufacturing Group, Inc. (TCMG), Unitech Tool & Machine, Inc. (Unitech), Apex Machining, Inc. (Apex), and Lor-Van Manufacturing, Inc. (Lor-Van, and collectively, “Defendants”) related to a January 23, 2024 Confidential Settlement and Release Agreement.
Defendants’ Alleged Unauthorized Transfers
Plaintiffs allege that they were subjected to unauthorized transfers of over $12 million in assets from 2018 to 2021, which were diverted into the hands of Defendants without proper accounting or documentation. These funds, which came from Baker and Emily Mayfield’s personal accounts and TBRM’s accounts, were allegedly used by Defendants for purposes such as acquisitions and general operational expenses, including payroll and loan servicing obligations. Despite the substantial transfer of assets, Plaintiffs assert that Defendants did not account for any indebtedness, nor did they receive any equity interest in Defendants.
The Settlement Agreement
After Plaintiffs discovered the alleged unauthorized transfers, Plaintiffs and Defendants entered into the January 23, 2024 Confidential Settlement and Release Agreement. Under the terms of the Settlement Agreement, Camwood Capital was required to repay a substantial sum of $11,741,000.00, plus interest, initially with a $250,000.00 payment due by September 30, 2024. The Settlement Agreement also stipulated that the Defendants would refinance an existing loan to free up capital for repayment to Plaintiffs and provide Plaintiffs access to Defendants’ financial records and documentation. Under the Settlement Agreement, failure to make payment is an Event of Default, which accelerated and made immediately due the $11,741,000.00, plus interest.
Defendants’ Alleged Breach of the Settlement Agreement
Plaintiffs allege that Defendants failed to comply with any of the obligations outlined in the Settlement Agreement. Specifically, Camwood Capital has not made any payment to Plaintiffs, including the September 30, 2024, initial payment; failed to refinance the third-party loan, and has not provided access to their books and records. As a result, Plaintiffs assert that Defendants’ conduct amounts to a breach of the Settlement Agreement.
In light of these breaches, Plaintiffs seek several forms of relief, including compensatory damages no less than $11,741,000.00, plus interest; attorneys fees’ pursuant to Texas Civil Practice and Remedies Code § 38.001, which allows for the recovery of attorney fees in breach of contract cases; pre- and post-judgment interest; and any other relief the court deems just and proper.
Personal and Business Implications
This case highlights the importance of clear, documented financial transactions between parties. For individuals, even if the parties involved in a transaction are relatives, friends, or business partners, the case sets forth an example of why the inclusion of disinterested lawyers, accountants, advisors, or other professionals can prevent lengthy and costly legal battles. For businesses, it underscores the need for proper accounting practices, transparent financial records, and adherence to contractual obligations to prevent lengthy and costly legal disputes.
Moreover, businesses should ensure that contractual arrangements, especially settlement agreements, are followed meticulously. Breaches can lead to significant financial exposure, including not only the repayment of debts but also additional damages, attorneys’ fees, and reputational harm.
Conclusion
Individuals, including athletes and artists, should consult with legal counsel before certain financial transactions or contracts are entered into, even if they are with trusted individuals or businesses. Business owners should also make sure to have proper accounting practices and transparent financial records. If you have questions about transactions made without your approval or about how certain transactions may impact you or your business, please contact TJ Hunt ([email protected]; 216.736.7284) or Kyle D. Stroup ([email protected]; 216.736.7284).
