EC3, Braun Strowman sues former business partner for fraud and breach of contract

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Crédit photo: IMPACT Wrestling & Ethan Miller / Getty Images

EC3 and Braun Strowman are currently involved in a lawsuit related to their commercial links with the Magic City Live and K5 Network brands after a former partner committed fraud and stole digital content from them.

According to court documents filed in Orange County, Florida, EC3 (Michael Hutter) and Braun Strowman (Adam Scherr) are suing former business partner Eric Holzer (also known as “Lord Business” on the K5 network. ) on several counts, including allegations of fraud, breach of contract and theft of digital content.

In 2018, EC3 (Hutter) was invited by longtime friend Jedediah Koszewski (JC) to purchase a “Direct-to-Garment” printer for use in a business he started with Holzer. After Hutter purchased the printer as a pair loan, the partnership was named “Magic City Prints” and Holzer and JC returned to Hutter to request an additional loan of $ 7,000 for additional printing materials for grow their business and Holzer offered to add Hutter as another partner.

According to the documents, Hutter accepted and purchased the equipment in May 2019 and they jointly and severally entered into a lease for warehouse space in Winter Garden, Fla. To serve as the base of operations for Magic City. Holzer then filed the Articles of Incorporation for Magic City on his own and without Hutter’s consent, and entered into the Articles of Association as the sole officer of the company. It was after this that Hutter introduced Scherr to the group and was promised that his clothing brand Meat Castle would be printed and fulfilled by Magic City, and the group entered into a joint venture agreement together.

The lawsuit goes on to state that Holzer offered Scherr to invest in Magic City and drafted a memorandum for the investment that required Scherr to pay $ 15,000 in return for a stake in the group and a specific percentage of profits. Scherr issued a check in November 2019 for the sum but received nothing in return for his investment and Holzer is believed to “have converted some or all of these funds for his own use and benefit.” A review of the joint venture’s bank account reveals that Holzer withdrew thousands of dollars from the account without Scherr’s knowledge or permission, a requirement for the terms of the JVA.

Read more: Braun Strowman doesn’t care about Alexa, Fiend will take on the monster at SummerSlam

Regarding the K5 brand, Scherr, Hutter, JC, and Holzer together formed K5 Entertainment Inc, which included a large investment of personal funds from Hutter and Scherr, which included seed money for video and audio equipment and d ‘other production costs. The lawsuit argues that the multimedia brand K5 would not exist without the involvement of Scherr or Hutter due to their celebrity status being the main reason viewers would visit the YouTube channel. Holzer, allegedly upset over a business case related to the companies in their group, then took an undisclosed amount of digital content as well as computer hardware and software without the consent of Scherr or Hutter. According to the complaint, Holzer has refused to return the content to K5, Scherr, Hutter or JC and he has no legal right to retain possession of the content.

Holzer filed a motion to dismiss and opened a GoFundMe page to help with legal aid. It was on the crowdfunding page that Holzer claims JC, EC3 and Strowman asked him to leave the two companies without compensation despite being more than a year invested in both brands. Holzer says he has maintained “a percentage of ownership of both companies” and lost access to business facilities without notice, and that the plaintiffs are still using the space and leased assets for “new businesses” and ” wrestling promotions’ without any compensation returned for its initial investments. Holzer claims he is disputing on the grounds that his former business partners did not act in good faith and breach their fiduciary obligations to him.

Lawyers for Scherr and Hutter are seeking return of the images and digital content by Holzer, as well as damages related to the unauthorized publication of their portraits by Holzer.

WrestleZone received the following response from Hutter, Scherr and JC’s legal team in response to the lawsuit, noting that they will rely on information in the court records and deny the opposing party’s allegations.

“We don’t market business through the media or in public forums. The trial papers contain our positions on the issues that are the subject of the trial. All the information you want to collect about the lawsuit is best found in the complaint files. ”

Learn more: EC3 confirms that it is not exclusive to IMPACT

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