Case 1:16-cv-04870-ALC-GWG Document 157 Filed 06/21/19 Page 1 of 3

Kent A. Yalowitz
+1 212.836.8344 Direct
Kent.Yalowitz@arnoldporter.com

June 21, 2019

VIA ECF AND E-MAIL

The Honorable Andrew L. Carter Jr.

United States District Judge
United States District Court
Southern District of New York
500 Pearl Street
New York, NY 10007

Re: World of Boxing LLC et al. v. Wilder et al., No. 16 Civ. 4870 (ALC) (GWG)

Dear Judge Carter:

This firm represents Plaintiffs World of Boxing LLC and Mr. Povetkin in the above-
referenced action.1 I write to request a pre-motion conference pursuant to your honor’s
individual practices, in anticipation of Plaintiffs’ motion to supplement the Complaint to add new
facts demonstrating Defendants’ bad faith breach of the Escrow Agreement.

World of Boxing, Mr. Wilder, DiBella Entertainment (“DBE”) and Chicago Trust
Company (the “Escrow Agent”) entered into the Escrow Agreement dated April 19, 2016,
whereby World of Boxing LLC placed in escrow $4,369,365 in funds and the Escrow Agent
agreed to “distribute such funds in accordance with the terms this Escrow Agreement.” As the
Court knows, on May 15, 2016, following Mr. Povetkin’s allegedly positive test result and the
postponement of the Bout, the attorney for Wilder and DBE wrote to the Escrow Agent to freeze
the funds in the Escrow Account.

Section 1.3(d) of the Escrow Agreement provides that if either Party objects in writing to
the disbursement of the Escrow Property, “the Escrow Agent shall not disburse any funds unless
and until it receives joint instruction from the parties or a non-appealable order from a court of
competent jurisdiction, at which time it shall disburse the funds to the parties as their interests
may appear.”

On April 19, 2018, this Court entered summary judgment in favor of World of Boxing
LLC and Mr. Povetkin (as defendants-counterclaimants in No. 16 Civ. 4423 (ALC) (GWG)),
dismissing the Wilder Parties’ claims for breach of contract. The Court’s Order stated that

1
World of Boxing LLC and Mr. Povetkin are plaintiffs in the above-referenced action and were
defendants-counterclaimants in No. 16 Civ. 4423 (ALC) (GWG). For simplicity, we refer to
them here as “Plaintiffs” and to DiBella Entertainment, Inc. and Messrs. Wilder and DiBella as
“Defendants” or “the Wilder Parties.”

Arnold & Porter Kaye Scholer LLP

250 West 55th Street | New York, NY 10019-9710 | www.arnoldporter.com
 Case 1:16-cv-04870-ALC-GWG Document 157 Filed 06/21/19 Page 2 of 3

Hon. Andrew L. Carter Jr.

June 21, 2019
Page 2

“WOB is entitled to an order directing the escrow agent to disburse to it all of the escrowed
funds.” Op. and Order at 43. Wilder and DBE appealed, as was their right.

On June 12, 2019, the Second Circuit affirmed in an unpublished order, holding that:

No one disputes that the fight did not take place on May 21, 2016. Thus, absent any
viable breach of contract claim against it, we agree that WOB’s funds should be returned
to it.

Order dated June 12, 2019 at 6.

Accordingly, on June 13, 2019, Plaintiffs wrote to the Escrow Agent to request
disbursement of the $4,369,365 million of escrow property that has remained in the Escrow
Account since May 2016.

On June 18, 2019, counsel for Defendants wrote to the Escrow Agent to object to any
disbursement of the funds held in escrow stating that: “I write to make clear that the referenced
decision is not a ‘final non-appealable order’ that would entitle a party to distribution of the
funds held in escrow pursuant to Section 3.5 of the Escrow Agreement.” See Exhibit A. On
June 19, 2019, the Escrow Agent informed Plaintiffs that they would not disburse the escrow
property as a result of the Wilder Parties’ objection.

Defendants’ renewed objection of the return of the Escrow Property to Plaintiffs has
triggered the Escrow Agreement’s liquidated damages provision. That provision provides: “The
parties agree and acknowledge that the submission of an objection in writing to the Escrow
Agent which is not made in good faith would cause harm to the party entitled to disbursement
and . . . the party who has filed such objection agrees to pay liquidated damages to the party
entitled to the disbursement in the amount of USD $2.5 million, not as a penalty but as a fair
estimation of the loss suffered.” Escrow Agreement § 1.3(d). Given the clarity of the obligation
to return the escrow money pursuant to the Second Circuit’s Order, the lack of any right of
further appeal, and the complete lack of any ground for discretionary review, Defendants do not
have a good faith basis for their objection.

Defendants indicated that they might seek en banc or Supreme Court review of the
Second Circuit’s ruling. But neither of these qualifies procedurally or substantively as an appeal
within the meaning of the Escrow Agreement. Both are discretionary decisions sought by way of
a “petition” not an “appeal.” Any petition for such review would be frivolous anyway. The
Second Circuit’s unpublished order did not address any unsettled area of law and did not involve
any issue of federal law at all. There is no prospect of any kind for further review. In reality

US 165109005v2
 Case 1:16-cv-04870-ALC-GWG Document 157 Filed 06/21/19 Page 3 of 3

Hon. Andrew L. Carter Jr.

June 21, 2019
Page 3

Wilder and DBE are not planning to petition for en banc review or certiorari. They have delayed
the return of the Escrow funds to cause harm to WOB—not for any good faith reason.

Accordingly, Plaintiffs respectfully request that the Court schedule a pre-motion

conference in anticipation of Plaintiffs’ motion to supplement the Complaint with new facts
demonstrating the Wilder’s and DBE’s breach of Section § 1.3(d) of the Escrow Agreement.

Respectfully yours,

US 165109005v2