Former partner sues BofA over Commanders sale
A former minority partner of Daniel Snyder has filed a federal lawsuit against Bank of America, alleging that the bank conspired with the NFL and Snyder to force his three minority partners to sell their stake in the Washington Commanders back to Snyder at a valuation far below the record $6.05 billion that Snyder was paid for the team.
Bank of America accused of conspiracy in Commanders sale
A former minority partner of Daniel Snyder, Robert Rothman, has filed a lawsuit against Bank of America, alleging that the bank conspired with the NFL and Snyder to undervalue the Washington Commanders. Rothman claims that Bank of America allowed Snyder to pay his partners a fraction of the team's true worth when they sold their stake back to him in April 2021. The lawsuit alleges that Bank of America turned a blind eye to financial red flags raised by Snyder's mismanagement of the team.
The centerpiece of the lawsuit is Bank of America's approval of a $55 million credit line taken out by Snyder without the knowledge or approval of his minority partners. The bank allowed Snyder to draw $38 million from the credit line without verifying whether he had obtained board approval. The lawsuit accuses the bank of ignoring Snyder's improper financial dealings and debt problems, which ultimately led to the forced sale of the franchise at a much higher valuation.
Rothman is seeking at least $75 million in compensatory damages, claiming that Bank of America's actions forced him to sell his franchise shares below market value. The sale of the minority partners' stake to Snyder, as well as the subsequent sale of the franchise to a group led by Josh Harris, was brokered by Bank of America.
Bank of America accused of prioritizing financial interests
The lawsuit alleges that Bank of America repeatedly put its own financial interests ahead of Rothman's and the other two minority partners. The bank failed to notify Rothman of the franchise's improper conduct and turned a blind eye to Snyder's financial mismanagement of the team. The lawsuit also claims that Bank of America allowed Snyder to over-leverage the franchise, knowing that it would eventually lead to his financial downfall.
The approval of Snyder's $55 million credit line by Bank of America raised concerns among federal prosecutors in the Eastern District of Virginia. A federal grand jury issued subpoenas for documents relating to the loan, and a criminal inquiry is said to be ongoing. The lawsuit alleges that Bank of America refused to provide documents related to the credit line without a subpoena or court order.
Rothman and his fellow minority partners had initially sought to sell their stake in the Commanders to a third party, but Snyder allegedly blocked the negotiations. The lawsuit claims that Snyder and Bank of America were motivated to block the sale to prevent Rothman from gaining access to evidence of Snyder's financial wrongdoing.
Bank of America accused of fraud and misconduct
The lawsuit accuses Bank of America and unnamed co-conspirators of committing wire fraud, mail fraud, and corporate improprieties on behalf of the franchise. The bank is accused of refusing to provide financial information, interfering with due diligence, and blocking the involvement of other investment banks, all to the detriment of the minority partners. The lawsuit alleges that Bank of America's actions negatively impacted monetary distributions to Rothman and his fellow partners.
Rothman, who has been a client of Bank of America's wealth management arm since the late 1990s, is seeking compensatory damages of at least $75 million. The lawsuit paints a picture of a bank that prioritized its own profits and turned a blind eye to Snyder's financial misconduct, resulting in Rothman and his partners being forced to sell their stake in the Commanders at a significant undervaluation.
