Dustin Johnson reaches settlement in attempt to recoup $3 million
Dustin Johnson has reached a settlement in his attempt to recoup $3 million he claims he was duped into giving his former attorney Nathan “Nat” Hardwick and his law partners, and will receive at least a $2 million payment if his settlement agreement is approved by a bankruptcy court.
The Irmo native and PGA star filed a lawsuit against Hardwick, partners Mark Wittstadt and brother Gerard Wittstadt, and their Atlanta-based law firm in Oct. 2014.
Johnson, 31, initially claimed in the suit that the defendants conspired to bilk him of $3 million with a fabricated investment opportunity to cover shortages in the operating and trust accounts of their firm and an affiliated real estate title company. The shortages were allegedly caused by misappropriations.
Hardwick was indicted and arrested by federal authorities in February on multiple charges including fraud and conspiracy in connection with his alleged theft of more than $20 million from the accounts of Morris Hardwick Schneider and the affiliated LandCastle Title company.
The firm, renamed Morris Schneider Wittstadt after Hardwick resigned his positions as CEO of LandCastle and managing partner of the firm in late August 2014 – a couple weeks after Johnson’s loan was secured – filed for Chapter 11 bankruptcy protection last July.
Johnson’s settlement is part of a bankruptcy plan that must be approved by the court, and will be paid through the law firm’s insurance policy with Endurance American Specialty Insurance Co.
Payments will be made through a liquidating trust and creditors have until July 21 to vote to accept or reject the plan. A plan confirmation hearing is expected on Aug. 2.
Johnson may have an opportunity to recoup his entire $3 million through the settlement. The $2 million payment is part of a $3 million unsecured claim that he is entitled to. His entitlement is in the highest classification of unsecured claims, but is part of more than $19 million in Allowed General Unsecured Claims, which are secondary to the payment of Allowed Administrative Claims, Allowed Secured Claims and Allowed Priority Claims in the case.
Johnson’s settlement was reached through mediation that took place on March 15. Johnson’s agent, David Winkle of Hambric Sports Management, said he would have no comment, calling the settlement a “private matter.”
As a result of the settlement, Johnson is dropping two lawsuits connected to his loan.
Johnson was seeking a $4 million payment, reflecting a total built into the contract if payments were late, and none were ever made.
This story was originally published June 4, 2016 at 10:04 PM with the headline "Dustin Johnson reaches settlement in attempt to recoup $3 million."