The fun begins - SCA now asking for money back...

[thehog]

This is SCA’s position, I do understand that. Tillotson was very specific in making just that point. But that is not necessarily what a court will conclude. When the original agreement was made, was there any recognition that a TDF could be won fraudulently, in a strict legal sense? That if LA doped to win it, then the agreement was void?

This may seem obvious to us now, but I think a lawyer could argue that doping is not, or was not considered at that time, as fraud in the strict legal sense. After all, Riis admitted he doped, and he was allowed to keep his TDF title. Suppose he had signed a similar agreement with the SCA. Your position implies he would also have to pay back the money, even though he is still officially the winner of the Tour. This would seem to violate the letter of the agreement, which was that if he won he would be paid.

Most if not all of the riders who made the podium during the LA years were doped, some like Ulle have more or less admitted it, but for the most part they have not been stripped of their results. Suppose Ulle had signed a contract guaranteeing him money if he finished on the podium, would SCA have a case for getting the money returned, even though Ulle has kept all his podiums except 2005?

I think LA’s lawyers could make the “they were all doping” argument, and say that while LA is now stripped of his titles, at the time that he won them he was no more fraudulent than other riders who have been allowed to keep theirs. That was just the way Tours were won those days. Remember, LA got the extreme penalty not because he doped, but because he refused to confess to doping. Tygart said if he had confessed he could have kept most of his titles. Would those titles still be considered fraudulent? In some sense, of course, but in a strict legal sense that would allow SCA to have a claim on the money? I doubt it.

You think LA will cough up $12 million, more or less, within two months. I hope you're right, and if you are, I will give you full credit for calling it. But I'm not yet convinced.

Doping is irrelevant also. Doesn't mean anything.

What is important is that the contract(s) were not entered into in "good faith" by one of the parties. In fact one party entered in the contract with "fraud" and perpetuated the fraud throughout the contract and associated hearings.

To put it another way; If SCA knew that Armstrong was doping and encouraging his teammates to dope - would they have entered into the contract? Of course not as they structured their risk on all athletes starting on a level playing field. The good faith clauses exist in all contracts by default language.

At the 2006 hearing SCA weren't attempting to prove doping they were attempting to prove fraud via doping and void the payout. They came unstuck because by trying to prove the doping they couldn't build a strong enough case to demonstrate fraud.

Now they don't need to demonstrate or prove fraud via doping. They have two formal sporting bodies ratifying the cheating which they will cite as evidence/judgement.

Its a slam dunk case.

In your Riis example it would be the same set of events. Regardless of whether ASO stripped him of his title or not he admitted to his drug use. SCA would also use this confession of proof to demonstrate that the contract was entered into under false pretences. Although I would say the Riis example is slightly different as to my knowledge the Danish Federation nor the UCI sanctioned him by official decision.

I would add there is extenuating circumstances in Armstrong's case. He can't afford to testify. He is protecting himself against upcoming Federal suits thus he is vulnerable to being taken to the cleaners by SCA.

2 months $12m at "no fault" - "undisclosed" sum.

 

[dadane]

The payouts for 2002, 2003 (5M) were Not in the settlement agreement.....

Which are now worth 10M++ and should also recoup the 2.5M in costs lost before. So, and this is where the lawyers here come in, can these be argued in a separate suit from the 2004 deal. Even if SCA can't overturn the settlement agreement (and the exact conditions are unknown), can they deal with these separately? 2-1 is better than 0-3.

 

[ChewbaccaD]

The payouts for 2002, 2003 (5M) were Not in the settlement agreement.....

I don't think they are looking for just the payouts from those years...

 

[Velodude]

SCA were after $12m comprising $4.5 million for his 2001/2002 and 2003 victories and $5m for his 2004 victory with, by simple arithmetic, $2.5m for legal costs paid on settlement.

So the demand of $12m embraces all amounts paid by SCA to Tailwind thence to Armstrong.

2001-2003 amounts would have an SOL problem as these amounts, I believe, did not form part of the Tailwind/Armstrong v SCA 2006 fracas. SCA withheld the 2004 bonus and Armstrong et al took issue through arbitration.

The confidential settlement agreement should have been drafted and executed to prevent any re-visitation to the dispute.

LA lawyer Herman has been quoted as writing in rejection of the SCA $12m claim:

“When SCA decided to settle the case, it settled the entire matter forever,” he wrote. “No backs. No re-dos. No do-overs. SCA knowingly and independently waived any right to make further claims to any of the money it paid.”

However, Armstrong, true to character, would have breached the confidentiality terms of the settlement agreement when he was boasting that he won the case. A breach of the confidentiality terms can have the settlement agreement set aside.

 

[dadane]

SCA were after $12m comprising $4.5 million for his 2001/2002 and 2003 victories and $5m for his 2004 victory with, by simple arithmetic, $2.5m for legal costs paid on settlement.

So the demand of $12m embraces all amounts paid by SCA to Tailwind thence to Armstrong.

2001-2003 amounts would have an SOL problem as these amounts, I believe, did not form part of the Tailwind/Armstrong v SCA 2006 fracas. SCA withheld the 2004 bonus and Armstrong et al took issue through arbitration.

The confidential settlement agreement should have been drafted and executed to prevent any re-visitation to the dispute.

LA lawyer Herman has been quoted as writing in rejection of the SCA $12m claim:



However, Armstrong, true to character, would have breached the confidentiality terms of the settlement agreement when he was boasting that he won the case. A breach of the confidentiality terms can have the settlement agreement set aside.

Thanks. This is very informative. Re. SOL: (now we are discussing real US law, of which I am pretty much ignorant, and not WADA code, etc.) what trumps an SOL?

 

[Benotti69]

I imagine the big reason why Armstrong wants to settle is to avoid a court case where it will come out that he lied in court.

That is the main reason i see a settlement being agreed due to the futher PR damage of jail time will do to him.

 

[ebandit]

go to jail and don't pass go

there is argument that lance never won the tdf..................

read now 'disqualified' if an athlete is disqualified the day after the

event they are not the winner why would it be different if

disqualification occurs later?

as others observe lance is in such a weak position............he can't defend

in court

sca should not budge an inch.................of course i hope to see lance

in court then in turn.....................going down!

 

[ChewbaccaD]

SCA were after $12m comprising $4.5 million for his 2001/2002 and 2003 victories and $5m for his 2004 victory with, by simple arithmetic, $2.5m for legal costs paid on settlement.

So the demand of $12m embraces all amounts paid by SCA to Tailwind thence to Armstrong.

2001-2003 amounts would have an SOL problem as these amounts, I believe, did not form part of the Tailwind/Armstrong v SCA 2006 fracas. SCA withheld the 2004 bonus and Armstrong et al took issue through arbitration.

The confidential settlement agreement should have been drafted and executed to prevent any re-visitation to the dispute.

LA lawyer Herman has been quoted as writing in rejection of the SCA $12m claim:



However, Armstrong, true to character, would have breached the confidentiality terms of the settlement agreement when he was boasting that he won the case. A breach of the confidentiality terms can have the settlement agreement set aside.

Settlement agreements, notwithstanding any clause contained therein, can be vacated based on certain contractual defenses. Period.

I'm not trying to sound di*kish in any way when I say that we covered that topic ad nauseam earlier in the thread. It led to me and the hog pulling out knives and dancing around like we were in West Side Story with the snapping fingers and everything. I would like to avoid doing that again as I'm really not into musicals.

 

[70kmph]

Double jeopardy defence

 

[D-Queued]

Double jeopardy defence

It was an arbitration... Tailwind launched suit against SCA...

Dave.

 

[howsteepisit]

Here is another angle for you all to consider. Say SCA was aware that Armstrong was doping, and further, upon doing their due diligence to price the indemnity found that cycling was rife with doping, and that the most egregious dopers were more likely to be caught than not. Part of the determination from SCA's view would be that there were other dopers to level the playing field, making a 5 or 6 time winner less likely, and that if Armstrong went too far in doping he would either die, or be caught or suffer physical failure. Given this, it would be at most immaterial if Armstrong doped, or make the odds against LA being able to remain at the top of the heap that long even better. SCA may have bet that there was not way for doping to work that well for that long.

Just a cynical thought for a cloudy day.

 

[D-Queued]

Here is another angle for you all to consider. Say SCA was aware that Armstrong was doping, and further, upon doing their due diligence to price the indemnity found that cycling was rife with doping, and that the most egregious dopers were more likely to be caught than not. Part of the determination from SCA's view would be that there were other dopers to level the playing field, making a 5 or 6 time winner less likely, and that if Armstrong went too far in doping he would either die, or be caught or suffer physical failure. Given this, it would be at most immaterial if Armstrong doped, or make the odds against LA being able to remain at the top of the heap that long even better. SCA may have bet that there was not way for doping to work that well for that long.

Just a cynical thought for a cloudy day.

You may be over-thinking this.

Accepting violations of contest rules, in any way, would be self-defeating.

Dave.

 

[howsteepisit]

No what I am saying is that SCA could have accepted the contract knowing that cheating was likely and that would be way to avoid payment if in fact LA won the requisite number of tours, its an additional layer of protection for SCA. I know it may be over thinking and cynical, but the insurance industry has never been known for being straightforward, and anybody who plays probabilities for a living as pretty damn good at evaluating entire scenarios, even unlikely one, with millions on the table.

 

[D-Queued]

No what I am saying is that SCA could have accepted the contract knowing that cheating was likely and that would be way to avoid payment if in fact LA won the requisite number of tours, its an additional layer of protection for SCA. I know it may be over thinking and cynical, but the insurance industry has never been known for being straightforward, and anybody who plays probabilities for a living as pretty damn good at evaluating entire scenarios, even unlikely one, with millions on the table.

Understood.

Not to say that there are not many industries with poor ethical track records and business norms.

As noted, though, that would be a self-defeating business practice. All you need is one whistleblower, one piece of email, or one recorded conversation and you have wasted millions.

Insurance companies typically look to re-insure or otherwise lay off part of the risk. In this case, they had LLoyds + one other insurer came in.

SCA would have to apprise them of such a set of assumptions. Otherwise, they could face major lawsuits.

It is just really, really difficult to go there.

The other contextual consideration is that the insurance contract was entered into just after the Festina clean up. Moreover, SCA had no prior exposure to cycling. Their 'hole-in-one' contract was originally developed for golf.

Anything is possible. And, more than a healthy dose of cynicism has been necessary for anything to do with Lance. However, it just isn't very probabl that SCA somehow anticipated doping and saw this as a way out of the contract.

If they had, they would have been far more pro-active about looking for doping before Lance won any TdFs.

If you wanted to game the situation as you suggest, would you rely on anything where the UCI could hide any doping?

Dave.

 

[Dr. Maserati]

Understood.

Not to say that there are not many industries with poor ethical track records and business norms.

As noted, though, that would be a self-defeating business practice. All you need is one whistleblower, one piece of email, or one recorded conversation and you have wasted millions.

Insurance companies typically look to re-insure or otherwise lay off part of the risk. In this case, they had LLoyds + one other insurer came in.

SCA would have to apprise them of such a set of assumptions. Otherwise, they could face major lawsuits.

It is just really, really difficult to go there.

The other contextual consideration is that the insurance contract was entered into just after the Festina clean up. Moreover, SCA had no prior exposure to cycling. Their 'hole-in-one' contract was originally developed for golf.

Anything is possible. And, more than a healthy dose of cynicism has been necessary for anything to do with Lance. However, it just isn't very probabl that SCA somehow anticipated doping and saw this as a way out of the contract.

If they had, they would have been far more pro-active about looking for doping before Lance won any TdFs.

If you wanted to game the situation as you suggest, would you rely on anything where the UCI could hide any doping?

Dave.

I am pretty sure that SCA did not lay off the risk - from memory Tailwind took out additional policies with Lloyds & Chubb.

 

[D-Queued]

I am pretty sure that SCA did not lay off the risk - from memory Tailwind took out additional policies with Lloyds & Chubb.

Were these 'sidecar' policies? Or, completely independent?

Dave.

 

[Dr. Maserati]

Were these 'sidecar' policies? Or, completely independent?

Dave.

Sidecar?? Don't lawyer me, please

I don't know what that is - but from the below it appears clear there were separate agreements with Chubb & Lloyds, (yes, I admit I am perturbed that I remember this stuff).

The bonuses were insured by three companies including SCA* a Dallas-based company that is responsible for $5 million of the payment to Lance.
Two other companies. Chubb and Lloyd's, promptly sent payment along with congratulations and kudos to Lance. We thank them. The day SCA's payment was due, however, we instead received a letter stating they would refuse to pay pending an "Investigation" into drug allegations against Lance.

http://d3epuodzu3wuis.cloudfront.net/R053.pdf

 

[howsteepisit]

I hear ya Dave,

It would be extraordinary for SCA to have included that in their evaluation, but as a bettor against the extraordinary I am not sure how far I think SCA would have gone in their due diligence. And as I said, its not a like;y scenario, but a thought I had after spending way too much time reading about structured finance, risk, and investment banking.

 

[Merckx index]

Sidecar?? Don't lawyer me, please

I don't know what that is - but from the below it appears clear there were separate agreements with Chubb & Lloyds, (yes, I admit I am perturbed that I remember this stuff).

http://d3epuodzu3wuis.cloudfront.net/R053.pdf

Now I'm a little confused. So in addition to the $10 million or so paid by SCA (plus legal fees), it seems that Chubb & Lloyds also paid $5 million? Why haven't they also sent LA a letter demanding return of the money?

A couple of other points of interest brought up by perusal of the linked letter:

1) If SCA at that time strongly felt that LA must have doped, why did they agree to insure him in the first place? Did they suddenly become aware of all the stories about LA doping, some time between 2000 and 2004? When they originally agreed to insure, did they assume winning six was highly unlikely, and when it happened, did they decide it must have been from doping? Something clearly happened at SCA during that period.

2) The letter says the 6 Tours in a row idea was conceived after LA won his second Tour. I remember pretty clearly at the time LA telling the world that he would never be able to match Indurain's five in a row, that he was grateful to win just two, etc., etc. So though this is very small time compared to his other lies, the reality was he had his sights set on a much longer streak almost from the beginning. Much as he had his sights on winning big endorsement money by being the cancer survivor who won Tours about as soon as he was out of the hospital.

This is a story, I think, that hasn't been emphasized as much. LA did not just build his empire as he went along, Tour after Tour. It was all planned out even before the first Tour. It seems he pretty much envisioned all of it happening.

 

[thehog]

Now I'm a little confused. So in addition to the $10 million or so paid by SCA (plus legal fees), it seems that Chubb & Lloyds also paid $5 million? Why haven't they also sent LA a letter demanding return of the money?

A couple of other points of interest brought up by perusal of the linked letter:

1) If SCA at that time strongly felt that LA must have doped, why did they agree to insure him in the first place? Did they suddenly become aware of all the stories about LA doping, some time between 2000 and 2004? When they originally agreed to insure, did they assume winning six was highly unlikely, and when it happened, did they decide it must have been from doping? Something clearly happened at SCA during that period.

2) The letter says the 6 Tours in a row idea was conceived after LA won his second Tour. I remember pretty clearly at the time LA telling the world that he would never be able to match Indurain's five in a row, that he was grateful to win just two, etc., etc. So though this is very small time compared to his other lies, the reality was he had his sights set on a much longer streak almost from the beginning. Much as he had his sights on winning big endorsement money by being the cancer survivor who won Tours about as soon as he was out of the hospital.

This is a story, I think, that hasn't been emphasized as much. LA did not just build his empire as he went along, Tour after Tour. It was all planned out even before the first Tour. It seems he pretty much envisioned all of it happening.

The change was the book LA Confidential which was cited as the reason for seeking "clarity" on the claims by SCA.

 

[Zweistein]

The change was the book LA Confidential which was cited as the reason for seeking "clarity" on the claims by SCA.

I am pretty sure that SCA did not lay off the risk - from memory Tailwind took out additional policies with Lloyds & Chubb.

when I read the same awhile back, I found it very strange he was willing to bet so heavily on himself. With his relationship with the uci, it is apparent why. This too may explain why he had no qualms in being a rat and turning in Hamilton and mayo. Losing a tour to either one would have meant a loss of winnings in excess 10 million if I am understanding the terms correctly.

With such heavy bets on himself, it becomes easy to see why it was perfectly acceptable to himself to justify anything. I kind of wonder if he made hard bets on himself in the comeback and that was the reason for his and the hogs outrage against contador. I too wonder if the comeback wasn't also fueled by insurance companies giving better payouts in the belief that it would be very unlikely for him to win the race after being out of the game for a number of years. Maybe, that was going to be a mega payday.

 

[thehog]

when I read the same awhile back, I found it very strange he was willing to bet so heavily on himself. With his relationship with the uci, it is apparent why. This too may explain why he had no qualms in being a rat and turning in Hamilton and mayo. Losing a tour to either one would have meant a loss of winnings in excess 10 million if I am understanding the terms correctly.

With such heavy bets on himself, it becomes easy to see why it was perfectly acceptable to himself to justify anything. I kind of wonder if he made hard bets on himself in the comeback and that was the reason for his and the hogs outrage against contador. I too wonder if the comeback wasn't also fueled by insurance companies giving better payouts in the belief that it would be very unlikely for him to win the race after being out of the game for a number of years. Maybe, that was going to be a mega payday.

Armstrong took swift action on SCA for good reason. He could handle journalists but he was very frightened by an insurance company sniffing about in regards to doping. Give the too much time and they may have begun to uncover a trail of lies and deception. They had to the money to find out.

The smoking gun of SCA now claim is that Armstrong engaged them. Meaning it was a premeditated deception.

12m no fault, undisclosed, 2 months.

 

[DirtyWorks]

Sidecar?? Don't lawyer me, please

I don't know what that is - but from the below it appears clear there were separate agreements with Chubb & Lloyds, (yes, I admit I am perturbed that I remember this stuff).

http://d3epuodzu3wuis.cloudfront.net/R053.pdf

Hmmm. So, let's say Wiesel sets the gamble up and pitches it to Pat and Hein. In exchange for their cooperation in the form of suppressed drug tests and so on, they get a part of the Lloyd's/Chubb/SCA payout. What's $2 million when you are keeping the other 5-10 million?

There's *still* something keeping Hein and Pat defending Wonderboy. Could that be it?

 

[Benotti69]

Hmmm. So, let's say Wiesel sets the gamble up and pitches it to Pat and Hein. In exchange for their cooperation in the form of suppressed drug tests and so on, they get a part of the Lloyd's/Chubb/SCA payout. What's $2 million when you are keeping the other 5-10 million?

There's *still* something keeping Hein and Pat defending Wonderboy. Could that be it?

I guess Hein and Pat are involved in lots of stuff linked to wonderboy.

They probably made big bets on wonderboy winning tours knowing that he would never fail any test, well not outside the lab.

 

[Dear Wiggo]

I guess Hein and Pat are involved in lots of stuff linked to wonderboy.

They probably made big bets on wonderboy winning tours knowing that he would never fail any test, well not outside the lab.

If that were the case you have 2 options yeah?

SCA-like company - who would surely be kicking up a fuss.
Mob-like group - who would surely be measuring up cement boots.