Michael Johnson was accused of paying him $500,000 “secretly”.

The lawsuit alleges that the founder of Grand Slam Track paid him “without proper board approval or justification.”

Michael Johnson, who founded the now-struggling Grand Slam Track, is accused by creditors of “secretly” paying him $500,000 last summer.

In a filing in U.S. Bankruptcy Court for the District of Delaware, creditors allege Johnson made the payment “without proper approval or justification from the Board,” eight days before the fourth and final event in 2025, in Los Angeles in June, was canceled due to cash flow problems.

Now, several vendors are seeking court permission to sue Johnson and Winners Alliance for $25 million. Three of the Grand Slam Track vendors, Momentum-CHP Partnership, Girraphic Park and SRK Strategies form the creditors’ committee and are tasked with representing all unsecured creditors. They owe about $3 million, $690,000, and $248,000, respectively.

Grand Slam Track filed for bankruptcy last December and announced a month later that it owed more than $40 million. The league originally claimed to have $30 million in funding, but Winners Alliance, an early investor in Johnson’s project, paid only $13 million.

Hoping to return in 2026 or 2027, Grand Slam Track had proposed a plan where athletes would be repaid about 85% of what they were owed, while creditors would receive about 1.5% of what was owed.

However, creditors rejected that plan last week when the committee said the league had shown “shocking levels of incompetence, bad faith, self-dealing and a breach of its fiduciary duty” while its proposed plan “violates a fundamental provision of the Bankruptcy Code.”

State lawyers on behalf of the creditors’ committee said of Johnson: “Mr. Johnson initiated a $500,000 payment to an allegedly unsecured note account. There are no board minutes reflecting authorization of this potential insider transfer.

“It is shocking that Mr. Johnson has chosen to secretly favor himself over athletes and other non-insider creditors while pretending to the public that he is selflessly seeking to advance the interests of athletes. Moreover, at the same time, the debtor knew that he was in a precarious financial position without sufficient cash to complete his contemplated season.”

The lawsuit also alleges that the Winners Alliance “instructed” Grand Slam Track to continue its matches in Miami and Philadelphia despite not having sufficient funds to do so. The filing said Grand Slam Track did not expect to be profitable until 2027.

Back in December, Johnson “refused to give up on Grand Slam Track’s mission and the future we’re building together” and faced “significant challenges that have been frustrating for many, including myself.”

In October, Grand Slam Track distributed $5.5 million to athletes, about half of what they were owed, but large sums remain owed.

The Grand Slam Track launched in 2024 with an unprecedented amount of money, planning to award $12.6 million in its first season. Each Slam winner was promised $100,000.