The International Swimming League, which at this point has spent as much time in the courtroom as it ever did in a natatorium, is suing its former law firm for more than $7 million.
The Zurch-based ISL and founder Konstantin Grigorishin sued the law firm Farella Braun + Martel in San Francisco Superior Court on December 30. The suit accuses the firm of professional negligence, breach of fiduciary duty, breach of implied contract, and unfair business practices in its anti-trust case against FINA (now World Aquatics)
The suit alleges that co-defendant Neil A. Goteiner, a partner in the firm, “persuaded ISL to hire Defendants…despite having little experience prosecuting antitrust actions.”
Among the claims by ISL:
- That representing the three named athletes (Katinka Hosszu, Tom Shields, and Michael Andrew) in the anti-trust suit and the ISL in their suit represented a conflict of interest and they did not obtain ISL’s informed written consent to the joint representation.
- That Farella “routinely exceeded” litigation budgets and “overbilled ISL by, among other things, double billing, overstaffing, and exceeding litigation budgets.”
- That the court entered summary judgement against ISL because the law firm “failed to timely designate an expert” in the anti-trust matter and “could not establish the relevant market needed to prevail on an antitrust came without expert testimony.”
- That defendants caused a “temporary liquidity issue” in November 2019 because they exceeded budget, which caused a delay in payment to the firm.
- Required Grigorishin to turn over several pieces of artwork from his infamous personal art collection as a guarantee to continue work.
In the document, ISL reveals several liquidity issues, saying they continued in 2020, and that Farella did not withdraw or help ISL find new counsel, but in each case required personal guarantees from Grigorishin, who is purported to have been a billionaire at the time.
The matter of conflict of interest will prove peculiar to the general public, because ISL recruited the athletes to participate in their suit and instigated the legal proceedings against FINA.
The suit is requesting that ISL and Grigorishin receive damages of $7.2 million, what they call the “full disgorgement of legal fees and costs…paid to defendants.”
The ISL, more than three years after its last meet, continues to face liquidity issues. While solidarity payments have trickled in for some athletes, others say that they still have not received hundreds-of-thousands of dollars in prize money and legal fees from the league’s final season, with payment delays beginning before the Russian invasion of Ukraine that allegedly made it difficult for Grigorishin to access enough of his vast wealth to make payments internationally.
In September 2024, the lawsuits in question, which are now six years deep, received renewed energy when the 9th U.S. Circuit Court of Appeals said in a 3-0 ruling that the groups provided sufficient allegations to let their antitrust cases move forward against World Aquatics. That reversed the lower court ruling.
The swimmers are now being represented by Jeffrey Kessler, a lawyer specializing in antitrust and sports law with the law firm Winston & Strawn.
More Background
The league repeatedly had issues with making payments on time, a problem that was exacerbated by Russia’s invasion of Ukraine in February 2022. The solidarity payments were supposed to begin in October 2021.
The league’s financial backer Konstantin Grigorishin was born in the USSR and acquired Ukrainian citizenship in 2016. Most of the billionaire’s business holdings are located in Ukraine, and he has also made money via the import of energy and natural resources from Russia. In 2018, he was one of 322 Ukrainian citizens that the Russian Federation imposed sanctions against.
At least one of Grigorishin’s companies was seized by the Ukrainian government as a “strategically important enterprise,” a move that the government said was made “in connection with military necessity.”
Earlier this year, one swimmer told SwimSwam that they received a text message from ISL commissioner Ben Allen that the Tokyo Frog Kings’ solidarity payment had been sent to the team and that a plan was in place to make remaining payments. That swimmer, who is on another team, said at the time that they still had not been paid.
The invasion of Ukraine also cancelled the planned 4th season of the ISL, which was initially postponed to 2023. While people close to the league say that organizers have not given up hope of a revival, the league office has been quiet for several years and most of the teams’ prior general managers have moved on to other enterprises.
Athletes mulled a league boycott over non-payment in the 2021 season. Jean-François Salessy, the ex-general manager of the Energy Standard team, and Hubert Montcoudiol, the ex-commercial director of the International Swimming League, accused ISL of financial mismanagement in a letter sent to SwimSwam in September 2021. Salessy and Montcoudiol wrote that ISL has allegedly neglected to properly pay supporting vendors and people, like press officials, webmasters, team managers, and even some elite swimmers. Salessy and Montcoudiol did not name anyone specifically that has been victim to the alleged practices, but they wrote that what they have witnessed directly contradicts ISL’s promise to honor all obligations to suppliers ahead of season three.
The league also released a statement in 2020 that it has faced financial challenges, but that it wanted to move on despite said challenges. At that time, SwimSwam reported that multiple season one vendors hadn’t been paid their full amount owed, but the league vowed to pay all money owed before Season 3. The league also added that it was working for the greater good of the sport.
Energy Standard won the titles in the 8-team league in 2019 and 2021, while the Caeleb Dressel-led Cali Condors won the 2020 season.
For all the things the ISL did wrong outside the pool, they sure did a lot of things right inside the pool.
Sure wish
FINAWA would take a page from the iSL events. College, too. Holding events that matter only once a year, or once every four years is not a good fan experience. Skins are fun to watch. Team based points are fun to watch and argue about, etc.I genuinely wonder if World Aquatics tried something similar, if ISL would sue them. I think they might.
There’s a give and take that has to happen as well. In World Aquatics’ eyes, they have things ‘that matter’ a lot more than once per year, they just can’t get the athletes and coaches to agree on how much those things ‘matter.’
No chance ISL wins on this.
Feels like it’s set up for a settlement. It’s hard to win lawsuits against law firms, for a number of reasons.
The same firm with about ten anti-trust lawyers acted for both sides of the suit? Brilliant stuff. Imagine that conflicts check coming back:
Admin: “So your team already acts for the claimants in this matter”
Partner: “I don’t see any reason why that should stop us taking the case on, please could we ask for some of this guy’s artwork as security for costs?”
Also they have entire sections of their website headed “Cannabis” and “Wine” https://www.fbm.com/services/
Not both sides of the suit. They acted as the plaintiff in two separate, but closely-related, lawsuits.
The athletes weren’t suing ISL, they were suing FINA, for basically the same reasons as the ISL was.
This is getting ugly for the ISL. problems on problems.