Update – Horizon/Valparaiso Lawsuit
Update – IUPUI pays $1 Million to join the Horizon League.
(St. Louis, MO) – When Valparaiso left the Horizon League to join the Missouri Valley Conference, they didn’t know they would join the Valley in a lawsuit brought against them by the Horizon.
The Missouri Valley Conference lost a team, gained a team and then got sued. All of that happened to the MVC since the basketball season ended in April. Wichita State left for the American Athletic Conference and the Valley replaced the Shocker athletic program by recruiting the Horizon League’s Valparaiso University.
The Horizon replaced Valpo with IUPUI and then sued Valparaiso and the Missouri Valley for the Crusaders’ untimely departure. The Horizon asserts …
“The Horizon League is entitled to recover the $500,000 in liquidated damages under Bylaw 2.5.3, as well as other damages proximately caused by Valparaiso’s breaches, plus statutory prejudgment interest at a rate between 6% and 10% to be set by the Court.”
League officials and the court documents indicate Valparaiso and other Horizon members voted to raise the conference’s exit fee from $50,000 to $500,000 in 2013 for teams leaving the league without providing a one-year notice of intent to leave. The suit claims Valparaiso President Mark Heckler …
“specifically suggested a formulation for an amendment to Bylaw 2, calling for a withdrawing institution to, among other things, pay liquidated damages in the form of an exit fee of $500,000 if it fails to comply with its obligation to provide the League with at least one year’s written notice of withdrawal. Valparaiso’s President further suggested that the liquidated damages provision should not apply if the member institution complied with the one-year notice provision, because advance notice might allow the League and its member institutions to manage or avoid much of the ensuing financial and other harms.”
Neither Valpo, nor the Valley believes they will pay the full $500,000 and MVC representatives are confident they will be completely exonerated in this case, but the Horizon League filed the suit in Evansville for the express purpose of being able to name their fellow mid-major conference in the proceedings.
In fact, Valparaiso is looking into taking the offensive. Spokesperson Nicole Niemi says the northern Indiana university was promised they wouldn’t have to pay an exit fee.
“In 2006, Valparaiso University entered into an agreement with the Horizon League that called for different terms and conditions than those set forth in the Horizon League bylaws,” said Niemi. “In particular, it had an exit fee that started out 10x greater than the exit fee set forth in the Horizon League bylaws and went down each year for 5 years. After 6 years, Valpo would no longer be subject to an exit fee. The Horizon League is refusing to recognize this agreement or compromise its position.”
Niemi says Valpo isn’t interested in litigation, but also that the university could actually be owed money by the conference.
“In addition, the agreement required Valparaiso University to pay an “equity buy-in” into the league that was 7x greater than the “entrance fee” set forth in the bylaws,” added Niemi. “The parties intended that amount to be repaid to Valpo upon our exit from the league. The Horizon League is refusing to do this or compromise at all. Valpo intends to file a counter suit against the Horizon League when the matter is dismissed from Vanderburgh County and refilled in Porter County, Indiana.”
MVC General Counsel Mitch Margo says there is no reason for the Valley’s inclusion in the suit and that the league’s invitation to Valparaiso was in no way illegal or unethical. Margo says the major reason Horizon lawyers included the MVC in the lawsuit was to obtain a court date in Evansville instead of Valpo’s home county of Porter County, Indiana.
The suit says the Valley “On information and belief, the MVC knew of Valparaiso’s obligations to the League under Bylaw 2 and the MVC specifically induced Valparaiso to join the MVC for the 2017-2018 academic year and thereby to breach its obligations to the Horizon League.”
Margo says it is hard to understand how the Horizon believes the Valley is involved. The league’s General Counsel since 1999 says if the league is ‘guilty’ of something, no league anywhere could invite an athletic program to join their conference.
“The only reason the Missouri Valley is a party in this lawsuit is because the Horizon League lawyer did not want to bring this case in Porter County where Valparaiso is located,” said Margo. “But if Valparaiso was the only defendant, it was required to bring the lawsuit there. By coming up with this claim that the Valley is somehow involved, he also then came up with this theory that because Evansville is a member of the Misssouri Valley Conference, he could bring the lawsuit in the county in which Evansville is located.”
Margo says the Valley has filed motions to move the venue back to Porter County.
He finds it ironic that the Horizon filed a suit against the Valley for inviting Valpo on virtually the same day they were inviting IUPUI to leave the Summit and join the Horizon.
Margo says if the Valley wins the change of venue motion, they should be released from the case, but if they continue to be a party to the suit, he believes the Valley will win on the merits of their defense.
Niemi defends the Valley.
“Valpo believes the claim against the Missouri Valley Conference is entirely frivolous.”
This case should move forward soon and ValleyHoopsInsider.com will work to keep you informed.