A court filing alleges the Grand Slam Track founder paid himself “without proper board approval or justification.”
Michael Johnson, who founded the now embattled Grand Slam Track, has been accused by creditors of “secretly” paying himself $500,000 last summer.
In a filing from the United States Bankruptcy Court for the District of Delaware, creditors claim Johnson made the payment “without proper Board approval or justification”, eight days before the fourth and final event of 2025 – in Los Angeles in June – was cancelled due to cash flow problems.
Several vendors are now seeking court approval to sue Johnson and Winners Alliance for $25 million. Three of Grand Slam Track’s vendors – Momentum-CHP Partnership, Girraphic Park and SRK Strategies – make up the creditors committee and it is their job there to represent all unsecured creditors. They are owed around $3 million, $690,000 and $248,000 respectively.
Grand Slam Track filed for bankruptcy last December and, one month later, stated that it was more than $40 million in debt. The league originally claimed it had $30 million in funding but Winners Alliance, one of the the early investors in Johnson’s project, had only paid $13 million.
In hopes of returning in either 2026 or 2027, Grand Slam Track had proposed a plan where athletes would be repaid about 85% of what they are owed, while creditors would get about 1.5% of what’s due.
However creditors last week rejected that plan, with the committee stating the league showed “shocking levels of incompetence, bad faith, self-dealing and failures to fulfil its fiduciary duty,” while its proposed plan “violates the fundamental bedrock tenet of the Bankruptcy Code.”
On Johnson, state lawyers, on behalf of the creditors committee, said: “Mr Johnson initiated a payment of $500,000 purportedly on account of an unsecured note. There are no board minutes which reflect authorisation of this insider avoidable transfer.
“Shockingly, Mr Johnson elected to secretly prefer himself over the athletes and other, non-insider creditors, while at the same time feigning to the public that he was selflessly looking to advance the interests of the athletes. Moreover, at the same time, the debtor knew it was in precarious financial straits without sufficient cash to complete its contemplated season.”
The filing also alleges that Winners Alliance “instructed” Grand Slam Track to go forward with its Miami and Philadelphia meetings, despite not having sufficient funds to do so. The filing claims that Grand Slam Track didn’t expect to be profitable until 2027.
In December Johnson “refused to give up on the mission of Grand Slam Track and the future we are building together” and faced “significant challenges that have caused frustrations for many – myself included.”
In October, Grand Slam Track distributed $5.5 million to athletes – around half of what they are owed – but large sums remain owed.
Grand Slam Track launched in 2024 with an unprecedented amount of prize money, planning to award $12.6 million in its first season. Each Slam winner was promised $100,000.