What do former Cy Young winner Barry Zito, pop legend Madonna and TV's Dr. Oz have in common? All have put financial stakes into a company called dotFIT, the founders of which, Zito claims in a lawsuit, duped Barry Zito Enterprises out of $3 million.
As Zito enters the final season of his legendary $126 million boondoggle of a contract with the San Francisco Giants, he's attempting to recoup some of the money he lost by investing in friend Michael Clark's fitness software startup. Zito is suing Clark, along with "fitness expert" Neal Spruce and bodybuilder Odd Haugen — who were hired to be the faces of dotFIT — and a total of five corporations in two complaints.
Based on those complexities, it doesn't sound like it's going to be EZ getting back BZ's money. Reporter William Dotinga of Courthouse News describes the story as "tangled," though Zito probably would say it's a cut-and-dried case of being lied to:
Zito claims Clark used their longtime friendship to entice Barry Zito Enterprises (BZE) into investing $3 million in dotFIT.
He claims Clark told him that dotFIT "was in the midst of a $20 million equity campaign that would allow dotFIT to exploit a valuable software interface (which dotFIT owned) and market it to health clubs worldwide."
"Clark further explained that he had others ready to invest and that if BZE did not act fast, it would lose its investment opportunity. But dotFIT now claims that it never sought to raise $20 million in equity (and never had $20 million in capital)," Zito says in the complaint. (Parentheses in original.)
Zito thought he was getting a 15 percent minority share for his $3 million, but instead the money went to repaying loans, to profit sharing, and to salaries and bonuses for others. And where does Madonna come in? Zito claims that one of the corporations involved in the suit, the Lafayette Holding Company, brought her aboard:
Zito claims that two weeks after Lafayette sold its interest in dotFIT, Lafayette's puppet company NEFC sold 12.5 percent of its interest in dotFIT to pop star Madonna for $625,000. NEFC sold another 12.5 percent of its interest to Go Mav, LLC for the same price a few weeks later, according to the complaint.
Madonna is not a party to the complaint.
She's still a Material Girl, seeking material wealth. Except it sounds like her money was used the same way Zito's was — to make other people rich. (And since when is Madonna not a party?)
In 2011, dotFIT was sold to a company called ShareCare — "an online interactive Q&A platform that allows healthcare experts to answer health and wellness questions" — created by WebMD founder Jeffrey T. Arnold and Dr. Mehmet Oz, neither of whom are being sued by Zito.
So Madonna and Dr. Oz — you're still on Barry's good side.
There's a big difference between the Giants not getting their money's worth on Zito, who mostly has underperformed since signing with them before the 2007 season, and Zito getting taken by his friend in a bad business deal. Zito came in with Cy Young credentials, having won the award in 2002, but he's only been that good with San Francisco for fleeting periods, including last year's World Series run. It's not been for a lack of trying.
Still, it's just a little bit ironic that one of Zito's own business decisions wasn't all it was cracked up to be.
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