Suit seeks to deliver blow across the Pacific

Sam Morris

Lorenzo Fertitta, center, and Frank Fertitta, right, are ringside at a 2006 Pride Fighting Championships bout at the Thomas & Mack Center.

By Jeff German (contact)

Saturday, Feb. 9, 2008 | 2 a.m.

It’s an international fight worthy of world-class billing — the U.S. champions of mixed martial arts against their Japanese counterparts with a winner-take-all purse of tens of millions of dollars.

But this is no cage match. The venue is the county courthouse.

Station Casinos executives Frank Fertitta III and Lorenzo Fertitta, majority owners of Ultimate Fighting Championship, delivered the opening blows last week when they filed suit in District Court against the Japanese rival they bought in April.

The 29-page complaint accuses Dream Stage Entertainment and its president, Nobuyuki Sakakibara, of violating agreements regarding the sale of Pride Fighting Championships. The media reported the deal to be worth nearly $70 million.

According to the complaint, filed under the name of Pride FC Worldwide Holdings LLC, a Delaware company the Fertittas set up to oversee the acquisition, Sakakibara sucker-punched them when he refused to submit to background checks and drug tests.

That refusal has the potential to hurt the Fertittas in the eyes of gaming regulators, according to the lawsuit.

About a year before the purchase, Shuukan Gendai, a weekly Japanese news magazine, wrote a series of stories reportedly linking Sakakibara and his company to the Yakuza, the Japanese mob.

The magazine, according to a translation of the articles posted by mixed martial arts blogger Zach Arnold, quoted a Japanese fight promoter alleging the Yakuza had hidden interests in Pride Fighting Championships. Sakakibara denied the allegations at the time.

After the allegations surfaced, Japanese network FUJI TV terminated its deal with Pride, the Japanese media reported.

The need for the background checks, the suit says, was “heightened further” by the Shuukan Gendai articles associating Sakakibara and others “with individuals involved in organized crime in Japan.”

Those allegations “could have a detrimental effect” on Station Casinos’ gaming license, the lawsuit says.

Jerry Markling, chief of enforcement for the State Gaming Control Board, said he had only limited knowledge of the allegations in the Japanese magazine stories.

But he added: “Any time there are allegations of organized crime involvement, it piques our interest.”

In the lawsuit, the Fertittas’ attorneys wrote that the background investigations were made part of the “post-closing actions” of the sale agreement to preserve the gaming executives’ good standing with regulators.

The brothers hired Spectrum Gaming Group LLC, an investigative company with offices in Las Vegas and Tokyo, to conduct the background checks.

Sakakibara, the suit says, assured the buyers that he and his people would “make all necessary disclosures and would be capable of demonstrating an acceptable record of high moral character in past and present business dealings and personal conduct that would satisfy and comply with the purchasing parties and their affiliates’ regulatory requirements, including their gaming licenses.”

But the suit alleges that Sakakibara and others “repeatedly and consistently refused to submit basic information” to Spectrum Gaming and “materially obstructed” its investigator.

The suit charges that Sakakibara’s failure to live up to the sale agreement has forced the Fertittas to shut down Pride Fighting Championships in Japan.

The brothers, the complaint says, are “entitled to the return and refund of millions of dollars” paid to Sakakibara and his companies.

Specifically, the lawsuit seeks the return of $1.5 million in consulting payments to Sakakibara.

The suit also accuses Sakakibara of violating a noncompete agreement on the mixed martial arts circuit, and it seeks compensatory and punitive damages from him.

Neither Sakakibara nor the Fertittas could be reached for comment.

Dan Polsensberg, the lead attorney who filed the suit against Sakakibara, was unavailable for an interview Friday, but he e-mailed a prepared statement.

Polsenberg said in the statement that Sakakibara’s failure to cooperate with a background investigation made it “impossible for our client to continue operating the Pride business.

“We are entitled to recover a substantial portion, if not the entire amount, of the purchase price and other fees paid to Dream Stage Entertainment and Mr. Sakakibara.”

Jeff German is the Sun’s senior investigative reporter.