Report: Bankrupt Sponsor Owes Nearly $10M In Rights Fees

The meteoric rise and fall of the sponge-maker category was nothing short of extraordinary. Accruing deal after deal, SpongeTech raised visibility overnight with more than 30 major sponsorship deals in less than two years. Thanks in part to the media hype around these deals and the discussion board frenzy they created, the assumption by many seemed to be that the now bankrupt company had been vetted by the teams and organizations that previously entered into agreements with it. Crain's is out with a fascinating account of how this all went down, the herd mentality it created and how the whole thing quickly unraveled.

Meanwhile, SportsBusiness Daily reports that sports teams account for more than $9.5 million of the money that creditors are looking to reclaim from the company. Among them, MSG is owed $512,000.

"They may get a little," bankruptcy trustee Brett Silverman told Crain's, "but probably they'll get nothing."

COO Steven Moskowitz is awaiting sentencing after pleading guilty to securities fraud, while Crain's reports that CEO Michael Metter has maintained his innocence.

#legaltag