Ron Crawford
Update, Dec. 7, 2020: The case was dismissed in January 2019, after both the plaintiffs and defendants requested it.
Original article:
Have you heard about an investment in a mobile platform for athlete training that erupted into a $1.5 million lawsuit?
Ron Crawford, Arkansas youth basketball sports maven and businessman, is trying to recover more than $500,000 plus $1 million in punitive damages.
Crawford is at odds with JLC2011 Inc. of Cleveland, formerly known as Stack Media Inc., and its CEO, Nick Palazzo.
According to his complaint, Crawford invested more than $400,000 in Palazzo’s venture. In addition to the funds from his individual retirement account and his Southland Metals Inc. in Maumelle, Crawford claims money owed on an adviser agreement with a monthly payout of $10,000.
It all started with an email from Palazzo on Aug. 16, 2016, asking if Crawford would be interested in making a small investment in Stack, which was growing beyond expectations and in need of additional capital “to get to the next milestone.”
It ended with Palazzo selling his company to Blue Star Sports of Frisco, Texas, less than a year later and leaving Crawford with unpaid promissory notes and more. Yes, Blue Star is a venture involving Dallas Cowboys owner Jerry Jones.
Palazzo touted his company as (take a deep breath before proceeding) “the leading content and media company serving athletes, coaches and sports parents with inspirational and educational video and article content, reaching millions of users each month through its website, stack.com, and its various syndication partnerships.”
Crawford alleges that Palazzo misrepresented many things, including the launch of a proprietary mobile training platform called The Performance Club. The list of alleged untruths cited by Crawford includes:
• Profitability: Stack Media actually was losing money despite Palazzo telling Crawford the company was on track to generate $12 million in revenue and $500,000 of income before taxes during 2016.
• Desirability: Foot Locker was not offering $15 million for Stack, and Nike was not willing to pay $4 per registered user of The Performance Club.
• Viability: The Performance Club was not a fully functional platform.
• Security: Crawford was not treated as a secured creditor, third in line behind Silicon Valley Bank of Santa Clara, California, and Portfolio Strategies Inc. of Tacoma, Washington.
The legal dispute, which began in Pulaski County Circuit Court, has shifted to U.S. District Court in Little Rock.
Palazzo curio: He played running back in 2000-03 for the Crimson at Harvard University.
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