Sports Website Wins Crucial Hearing In Free Speech Battle With Student Loan Baron

SAN DIEGO - June 25, 2013 - PRLog -- NOTE TO EDITORS:  Hyperlinks have been disabled in this release.  Please visit http://www.sailinganarchy.com/SA-Legal-Defense/ for the hyperlinked release.

A San Diego-based sailing website won an important motion in its battle against loan company CEO Daniel Maxwell Meyers thanks to a ruling earlier this month, when California Superior Court Judge Earl Maas II rejected Myers’ contentions.

“We’re gratified that Judge Maas saw right through Meyers’ strategy to try to bankrupt us before we get a chance to prove just how ridiculous and unscrupulous this lawsuit is,” said Scot Tempesta, owner and publisher of SailingAnarchy.com. Meyers’ motion for attorney’s fees, if successful, would have put Sailing Anarchy, Tempesta, and co-defendant editor Alan Block on the hook for almost $120,000.00 in fees incurred by Meyers in the prosecution of his claims that he was wrongfully defamed. It would have likely bankrupted the site before it could even get to trial with attorneys fees that Meyers’ attorneys say represent the cost of litigating a preliminary motion and appeal last year.

Tempesta, along with co-defendant and co-editor Alan Block, are now in their fourth year of battle against Meyers over a 2009 photo caption they published identifying the well-known CEO and yachtsman as a “multimillionaire grifter.” In a libel suit filed in 2010, Meyers claimed the niche website’s use of the word ‘grifter’ amidst amusing hyperbole and a funny photo exposed him to ridicule, contempt, and even hatred while “damaging his reputation and causing him emotional distress.”

It’s not the first time someone has called Meyers names; in 2005 the 45 year-old former stock trader and arbitrageur resigned from First Marblehead  – the student loan securitization company he founded - under a cloud of scandal involving inappropriate gifts. CEO Meyers, it was widely reported, was allegedly forced to quit after giving $32,000 worth of gifts to Bank of America Senior VP Kathy Cannon in violation of his company's ethics policies. The bank tipped off First Marblehead to the scandal, firing Cannon for also violating the bank’s ethics rules. In the wake of the scandal, First Marblehead’s stock price plummeted immediately, losing nearly 25% of its value.

Meyers returned to First Marblehead in 2008 and quickly garnered more criticism for his questionable business practices, including siphoning off millions from his company for travel in his Gulfstream jet, cashing out stock to the tune of nearly 100 million dollars before the value of the company plummeted to record low prices, and being awarded millions of shares of instantly-vesting restricted stock during a period when Marblehead posted constant losses and cut their workforce by some 90%.

Meanwhile, investigations by both the SEC and NY’s former Attorney General led to strict regulations of the private student loan boom Meyers helped to create; regulations that helped end what was called “a massive scam perpetrated on the socially disadvantaged” and left First Marblehead with little left to sell.

But the most stunning revelation about Meyers’ sordid business history came just last March; after nearly 7 years of litigation, a Boston judge ruled that Meyers welshed on a business deal with a personal friend who had helped him maintain control of First Marblehead in the company’s early days. The judge ordered Meyers to pay one of the largest awards in the court's history - $45 million plus millions in interest - to compensate Meyers' former friend and business associate for violating the obligations of good faith and fair dealing in every contract.

Meyers, known in the investment community as Jabba the Hutt because of his girth and cantankerous disposition, has a personal vendetta against SailingAnarchy.com, according to Tempesta, probably because the website has been critical of some of Meyers’ high-profile friends, including billionaire America’s Cup team owner Ernesto Bertarelli. The blog’s constant criticism of the Swiss sailor occurred during the run up to the 2010 America’s Cup, itself fraught with litigation amidst claims that Bertarelli tried to rig the rules for the oldest trophy in sport in his favor - claims that Meyers disagreed with repeatedly and publicly in support of Bertarelli.

According to Tempesta, the present case has nothing to do with libel and everything to do with a personal vendetta. “He looked me in the eye and told me that he would destroy the website and take my house. He’s got a witness making up statements that have no basis in fact. I think he’s out for blood,” he said. “All of Meyers’ claims are an obvious front for his real goal: “To bankrupt us with thousand-dollar-an-hour celebrity LA lawyers so he can look good for his sailing peers and sycophants,” Tempesta said.

Tempesta’s lawyer, Robert J. Young, said he was excited to see the case move ahead. “ I was greatly pleased with the obvious and sound conclusion reached by the Court today. Whether or not the comments made by Sailing Anarchy were, in fact, libelous remain to be seen. Judge Maas hit the nail on the head when he admonished counsel as to the soundness of their claims,” said Young. “We’re confident that a jury will see right through Mr. Meyers when they learn the truth about him. After all, in these type of cases, truth is the ultimate defense and I have every confidence that when presented with the facts, the jury will support my clients’ contentions and the freedom of the press to tell it like it is.”

Tempesta and Sailing Anarchy have launched a Legal Defense Fund to help pay the extensive fees and costs necessary to defend such a case and bring the case to trial. “There’s no way a little niche website can compete with the hundreds of thousands of dollars Meyers’ seems happy to throw away because he doesn’t like someone, and we’re hoping our community will band together to help us survive, and to fight for free speech in the sport we love.”

More about the case, along with the link for donations, can be found here.

For more information about the case, the parties, or Sailing Anarchy, please contact:

Robert J. Young

Law Offices of Lindenbaum & Young

RJY@lindenbaumyoung.com

Scot Tempesta, Editor & Publisher

Sailing Anarchy

editor@sailinganarchy.com