Jan 24, 2010

Settlement of USCF Lawsuits

The following was posted on the USCF website this weekend:

By USCF Executive Board
January 23, 2010
The USCF announced it has agreed to a settlement with Susan Polgar and Paul Truong stemming from lawsuits filed by both parties. Polgar’s lawsuit, filed in August 2008, alleged libel, slander, defamation and other claims. USCF’s California lawsuit, adding claims against Susan Polgar in October 2008, alleged email hacking and wire fraud. The USCF also filed an Illinois lawsuit against Susan Polgar and Paul Truong to remove them as Executive Board members and end their relationship with the USCF for not acting in the best interests of the USCF.

Under the settlement agreement, all named parties except Gregory Alexander and Sam Sloan have agreed to dismiss all claims and counter-claims in the actions in Texas and California. The Illinois lawsuit will end with a judgment confirming that Susan Polgar and Paul Truong are no longer Executive Board members. The USCF’s civil case against Alexander for email hacking and wire fraud continues, and Alexander is also facing similar federal criminal charges in California.

As part of the settlement, Polgar and Truong have agreed to never contest the USCF Executive Board’s action in revoking their USCF memberships; acknowledge that they are no longer members of the USCF or members of the USCF Executive Board; agree to never seek, run for, or accept a leadership position in the USCF; and will never contest the Delegate’s actions that ratified the decisions of the USCF Executive Board at the August 2009 Annual Delegates Meeting.

Under the settlement, the USCF will allow Polgar and Truong to be playing, non-members of the USCF and will be listed as “Playing Non-Member Status.”

The USCF Insurer, Ansur America Insurance Company, a member of Frankenmuth Financial Group, has agreed to provide $131,000 to the USCF and $39,000 to Polgar’s attorneys.

The USCF is pleased that this matter is finally settled and that no USCF funds will go to Polgar and Truong. Additionally, the USCF receives $131,000 to agree to a settlement.

Unsurprisingly, some interested members are beside themselves because the legal actions weren't played out to the bitter end. Others are furious because the settlement wasn't achieved 6 months or a year ago. Some think that a portion of the actions should have never been undertaken, and yet still others think that some amendments to the by-laws might have averted the whole mess entirely. Mistakes were made. Money was wasted. Chess in the United States was not advanced.

At the core of this mess were some perverse and monumentally stupid postings, generally now known as the Fake Sam Sloan postings. The facts surrounding these postings are clear enough for me and can largely be found in the Mottershead Report. I am not surprised that it took hundreds of thousands of dollars to resolve the trouble these posts caused. But we cannot do this again.

The preventative solutions are likely complex, and some of these solutions will reveal themselves through comprehensive and thoughtful post mortems. The simplest answer, though, will reside in answering the question of how do we get good and talented people, who will put the game first, to serve.

One more thing. To our officers and staff, who were undoubtedly impacted plenty by all of this, and to those on the EB: Thanks for seeing this through.

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