In a hearing scheduled a day before Cal Poly’s football home opener Sept. 20, a bankruptcy judge could decide whether the university is allowed to cover convicted felon Al Moriarty’s name on the Alex G. Spanos Stadium scoreboard, according to a motion filed in bankruptcy court this week.
In the event that strategy doesn’t work, Cal Poly is also negotiating with the bankruptcy trustee handling Moriarty’s case to allow it to cover “Moriarty Enterprises” with signs that declare either “#CalPoly” or “Go Cal Poly.”
Moriarty, 81, was convicted earlier this month of several counts of fraud, which prosecutors say were related to a Ponzi scheme that cost investors $22 million.
A former Cal Poly athlete and longtime Mustangs sports booster, Moriarty paid $625,000 in 2009 for naming rights to the new video scoreboard. Since then, the Hall of Famer’s name has graced the top of the scoreboard.
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Because he filed for bankruptcy protection, however, his naming rights were transferred to a bankruptcy trustee assigned to pay back creditors. Cal Poly could face punitive damages and a contempt charge if it removes or covers the Moriarty name.
In a document filed in U.S. Bankruptcy Court this past week, an attorney for Cal Poly asked a judge for permission to cover up Moriarty’s name before Cal Poly’s home opener.
“Due to the debtor’s recent plea, Cal Poly is suffering harm by having the name ‘Moriarty Enterprises’ remain on the scoreboard,” the motion notes, later adding, “Cal Poly’s football season commences on Sept. 20, 2014, and if the court grants the motion, it is imperative that Cal Poly be able to take action immediately.”
In previous documents, attorneys for bankruptcy trustee Michael P. Klein said Moriarty was insolvent at the time he purchased the naming rights. As a result, they said, Cal Poly benefitted when it accepted Moriarty’s money because the money was obtained through fraudulent means.
The trustees asked Cal Poly for that $625,000 so it could be directed toward Moriarty’s creditors, but Cal Poly rejected the claim.
According to Cal Poly’s motion, the university has been negotiating with the trustee over the scoreboard since last September. However, negotiations stalled. An attorney for the trustee told The Tribune in a story published Aug. 23 that Cal Poly had not been willing to compromise. (Cal Poly did not comment on negotiations for that story.) As a result, he said, a lawsuit was filed, seeking to compel Cal Poly to pay.
“Shortly thereafter, the negative press against Cal Poly began ,” wrote Christopher Alston, a Seattle attorney who filed the Cal Poly motion.
Tribune stories and editorials about the scoreboard, the motion states, made it appear as if Cal Poly wasn’t negotiating.
“In reality, it is the trustee who has refused to negotiate,” the motion continues, “and instead is trying to get the press and the public to put pressure on Cal Poly to pay him $625,000 to make him go away.”
Cal Poly should be allowed to remove the name, the motion argues, because Moriarty acted in bad faith by committing acts of fraud.
“Cal Poly is suffering and will continue to suffer injury if ‘Moriarty Enterprises’ remains on the scoreboard. … ‘Moriarty Enterprises’ is painful to many people, and Cal Poly wants, at a minimum, (to) cover or remove the name.”
If the court on Sept. 19 will allow it to cover the name, “Cal Poly can take immediate steps to remedy the current situation, including announcing to the public that ‘Moriarty Enterprises’ will be removed from the scoreboard,” Alston wrote.
Meanwhile, Cal Poly attorneys are still negotiating with the trustee. In an email sent to the trustee’s attorneys Tuesday, Alston again requested permission to cover Moriarty’s name.
“In light of his recent plea bargain,” Alston wrote, “having that company name on the scoreboard obviously is a problem for Cal Poly.“
After requesting that the university be allowed to cover Moriarty’s name with either “#CalPoly” or “Go Cal Poly,” Alston demanded a quick response.
“Cal Poly is not willing to wait, however, for the trustee to respond to this simple and reasonable request, especially in light of the trustee’s decision to file suit rather than respond to our Dec. 4 settlement email.”
In that email, also from Alston, Cal Poly offered to have the trustee sell the naming rights, though Cal Poly insisted it have a say in which businesses could advertise on the scoreboard.
“Attached is a list of businesses and organizations that either compete with existing sponsors or are inconsistent with the principals and/or mission of a public institution of higher learning which Cal Poly needs to have excluded from bidding on the agreement,” he wrote.
The list of businesses was not available.