Report: Armstrong pays $10 million to settle SCA litigation case

Image 1 of 6

The Sunday Times has reported that Lance Armstrong and his management company Tailwind Sports Corporation have settled their legal battle with the SCA Promotions company, apparently paying more than $10 million to the company that agreed an insurance policy covering the cost of bonus payments for Armstrong’s Tour de France victories.

David Walsh reports in the British newspaper that Armstrong has now settled all but one of his legal battles after confessing to doping, with only the case initiated by the US Justice Department and former friend and teammate Floyd Landis outstanding.

The Justice Department is fighting to recover some of the estimated $30 million the US Postal Service paid to sponsor the team, with Landis likely to take 25% of any award as part of a qui tam Whistleblower legal suit. The legal battle could see Armstrong forced to pay three times the sponsorship figure if he loses the case, with the Sunday Times suggesting this could lead to a penalty of up to $90 million. A pre-trial settlement would likely see both parties agree on a lesser figure but still leave Armstrong facing a significant payment.

The disgraced Texan has already settled with the Sunday Times, paying a reported £300,000 he won in a libel case against the paper in 2006.

SCA Promotions won its case after a long legal battle that began in 2005, when it first refused to pay Armstrong’s $5 million bonus for winning the Tour de France. Armstrong sued SCA Promotions and won the case, obtaining an additional $2.5 million in costs. In the 2005 arbitration hearings, Armstrong testified under oath that he did not use performance-enhancing drugs. However his confession to doping and the loss of his seven Tour de France titles in 2012 opened the door to SCA Promotions recovering the money it had paid Armstrong.

Armstrong’s lawyers claimed that the initial Texas arbitration verdict could not be overturned but the injustice was finally corrected last week, though both parties have agreed not to publicly discuss the terms of the settlement. SCA first won its case in February but Armstrong tried to appeal the sentence.

“Perjury must never be profitable,” the majority wrote in the February decision, according to a report in the Guardian. “Tailwind Sports Corp and Lance Armstrong have justly earned wide public condemnation. That is an inadequate deterrent. Deception demands real, meaningful sanctions.”

The Guardian added that SCA President and founder Bob Hamman praised the ruling saying: “It is hard to describe how much harm Lance Armstrong’s web of lies caused SCA but this is a good first start toward repairing that damage.”

There was no initial reaction from Armstrong to the outcome of the legal battle.