Ali Sues Former Co-Directors to Nullify 1988 Contract
Boxer gave 40 percent of his rights to life story without any payment

Norfolk, Virginia, August 28, 1999 -- Muhammad Ali's greatness as a boxer and
reputation as an athletic legend make his life story a potential film spectacle.
But like so many in the boxing world, he feels victimized by those who claimed
that were looking out for his best interests. In fact, he is suing his former
lawyer, friend and financier for allegedly defrauding him into giving away
control of his life story.
Ali brought suit against Richard Hirschfeld, a former Virginia lawyer convicted
of fraud in 1991 and now living out of the country to avoid additional charges.
Ali claims that Hirschfeld improperly persuaded him sign his rights in 1988,
taking advantage of the former three-time heavyweight champion's weak condition.
Ali wants his contracts with Hirschfeld and former adviser Jabir Herbert Muhammad
declared void based on undue influence and a lack of "consideration" -- a legal
term meaning a requisite obligation of a contracting party. Ali says he was
never paid anything for signing the contract 11 years ago, but gave away a 40
percent interest in his life story to Hirschfeld and Muhammad. The defendants
reject those allegations, according to a Norfolk newspaper, stating that Ali
received "the benefits that the defendants were willing to offer him," according
to one of the attorneys for the production company set up by the defendants.
The allegations, if true, demonstrate how easily one's rights can be taken away
under a contract. A common occurrence in the entertainment world, artists and
musicians have routinely done so over the years, from Elvis Presley to many
lesser-known talents.
According to the complaint, here's how it worked. A company called Muhammad Ali
Productions Inc., was created, whereby Ali, Hirschfeld and (Jabir) Muhammad
served as directors. Ali assigned his interests to the company, which owned
exclusive rights to any
autobiography or authorized biography of Ali's life, including books and movies.
Each director had one vote.
Uneven Arrangement
With that voting arrangement , it was possible to subvert Ali's interests and
viewpoints by voting him down, 2-1. That is what is alleged. Hirschfeld and
Muhammad had the power to approve or disapprove projects based on Ali's life
story, even over Ali's objections. So despite the fact that Ali retained 60
percent ownership of the company, he had no management control.
In his lawsuit, Ali claims that Hirschfeld and Muhammad abused their power by
not explaining the documents before he signed them. If that is true, it raises
two issues. The first being the lack of proper information given to Ali (who was
already exhibiting diminished capacity due to his head injuries from the ring)
and a breach of duty to Ali by Hirschfeld, his attorney.
Directors of a corporation have what are known as fiduciary duties. Generally
they must act in the best interests of the corporation and its shareholders or
else they can be liable to the other directors and shareholders. If one of the
directors fails to provide proper and timely information to another and if that
directors takes personal advantage of the situation, acting in his own interests
above that of the corporation -- a breach of fiduciary duty exists. The fact
that Ali's contract gave him no payment also does not help.
New Movie Rights
The suit comes at a time when Columbia Pictures is planning a film about Ali,
with the former champion's cooperation, to be shot next year. Ali claims that
Hirschfeld and Muhammad interfered with the agreement to make that film. Earlier
this year, the production company filed suit to stop the Columbia film.,
claiming that Ali sold his right to Columbia without consulting them. The suit
was ultimately dropped.
Hirschfeld, in particular, has been a controversial figure. In 1991, he was
convicted of tax and securities fraud, served four years in prison, then was
paroled in 1995. One year later, he fled the country after additional federal
fraud claims were filed. He ultimately wound up in the Canary Islands, off the
coast of Africa. It will be difficult, if not impossible, to compel him to
defend himself in the United States. Even if Ali wins the case, any judgment
against Hirschfeld will be difficult to enforce.

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