Boxing News: Manny Pacquiao Files Lawsuit Against Murad Muhammad

NEW YORK (April 27, 2005) – Former two-time world champion Manny Pacquiao announced today that he has filed suit against his promoters M&M Sports, Inc. and Murad Muhammad in the United States District Court for the Southern District of New York.

The lawsuit alleges, among other things, that the defendants corrupted Mr. Pacquiao's business managers by transferring more than 30% of Mr. Pacquiao's purses to a shell limited liability company controlled by the business managers on the fiction that Mr. Pacquiao's United States taxes would be paid out of those monies. In fact, unbeknownst to Mr. Pacquiao, the tax monies were never paid, leaving Mr. Pacquiao with a massive bill for back taxes, penalties and interest. As alleged in the complaint, the Internal Revenue Code required M&M Sports to withhold Mr. Pacquiao's tax monies, and the defendants diverted these funds in violation of the law.

The complaint alleges that this illicit arrangement between M&M Sports, Mr. Muhammad and the business managers resulted in the business managers agreeing to purses for Mr. Pacquiao that were significantly below market.

In essence, the business managers stood to make more money by stealing 30% or more from Mr. Pacquiao's purses than they would have earned from a straight ten percent fee on properly negotiated purses. According to the complaint, this scheme against Mr. Pacquiao was furthered by M&M Sports' refusal to provide Mr. Pacquiao the disclosures to which he is entitled by the Ali Act.

“It has taken me awhile to come to terms with the fact that I have been cheated by people whom I trusted,” stated Mr. Pacquiao regarding the lawsuit today. “I intend to see this suit to the bitter end so that I can recover every dollar that was stolen from me, as well as help protect other fighters from being taken advantage of by Mr. Muhammad. As for the immediate future, my fans can rest assured that I will be fighting soon, but not with Murad Muhammad or M&M Sports as my promoter. As of today, I have instructed my new management to begin negotiating for my next fight and fights thereafter. I will never fight again for Murad Muhammad and M&M Sports.”

Judd Burstein, Esq. of Judd Burstein, P.C., a New York firm, and Keith Davidson, Esq. of Davidson & Associates, P.L.C. of Beverly Hills, commenced the suit today on behalf of Mr. Pacquiao. Mr. Davidson serves as part of Mr. Pacquiao's new management team, which also includes Shelly Finkel and Nick Khan.

“The complaint we filed today is just a first salvo, fired with only limited available information,” said Mr. Burstein, Mr. Pacquiao's lead litigation counsel. “If the discovery process in the case proceeds as I expect it will, we will be amending the complaint by adding extensive new factual allegations and a likely claim under the federal racketeering law.”