Bankrupt Businessman James Agate Angles for a Slice of Billionaire Ted Forstmann's Riches

During the last few months of 2007, Agate turned down Forstmann's offer of $10,000 a month and coverage of Agate's medical bills for a year. Agate continued to blame Forstmann for losing millions in the Segura deal, and wrote to Forstmann that he was buried under $2 million worth of debt. At one point, Agate even asked Forstmann for a housing allowance, stating it was impossible for him to rent a home due to a recent eviction and past foreclosures.

"If you are unable to comprehend the difference between me and a slimeball, then there is probably nothing I can do to convince you otherwise," Agate wrote Forstmann in September 2007.

Ted Forstmann

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Four months later, in January 2008, Agate wrote Forstmann, "I have absolutely nothing more to lose in attempting to get you to resolve this dire financial situation I am in (it is just 'pennies' to you, as you often say)."

Agate portrayed himself as destitute, and after he filed the lawsuit on Feb. 29, 2008, it became unmistakably clear that he wanted to settle for big bucks. In May 2008, according to court documents, Agate proposed that Forstmann place $5 million in an escrow account, to be used to pay the IRS, his lawyers and his other creditors. Agate would pocket $300,000 and agree to keep his mouth shut. Five months later, Agate presented a similar offer but upped the amount to $7 million. 

Unfortunately for Agate, a multimillion-dollar payday didn't happen. He withdrew his case against Forstmann in August 2008.

In January 2009, a Forstmann attorney wrote to Agate's lawyer, "In truth, Mr. Agate has engaged in a lengthy history of making spurious legal allegations to attempt to extract money from Mr. Forstmann." As for Agate's threats to turn Forstmann over to the IRS, Forstmann's attorney wrote, "Mr. Agate should truthfully respond to the IRS."

The two eventually signed a confidential settlement in April 2009. Agate received $575,000 in exchange for his promise not to sue again.

For nearly a year, Forstmann barely heard a peep out of Agate. The settlement money was being paid in three installments over 12 months, and each man returned to his own life.

For Forstmann, that meant yachts, country clubs and beautiful women. For Agate, it meant something quite different.

His life appeared to be in shambles. Agate Printing had been suspended by the California Franchise Tax Board (the company was reinstated in October), and he was buried under hefty state and federal tax liens. Agate was also embroiled in a lawsuit against his apartment complex near Toluca Lake, claiming he'd been robbed three times in less than a month, and had lost his golf club memberships for apparently not paying his dues.

In April 2010, just days after the final settlement installment was paid, Forstmann claims Agate began demanding money again. Agate sent Forstmann an e-mail, "appealing to [him] on moral grounds." Agate said the settlement "fell pathetically short of satisfying my pressing obligations." He added, "Like a Bernie Madoff victim, I am broke now due to very little fault of my own."

He told Forstmann, "This life I've been living is no way for anyone to live, especially me. I can't have a bank account, lease an apartment, and the printing business is all but dead."

Agate offered several "possible solutions," including that Forstmann start a charity for Agate to run, sponsor Agate on the World Poker Tour, "start a real estate company and split the profits," and lend Agate money "to make me whole."

Five months later, Forstmann was hit with a new lawsuit. It was nearly identical to the one Agate filed in 2008, with one notable exception: This time Agate was not the plaintiff; it was Agate Printing.

The initial complaint did not mention sports betting, and Agate once more hoped to settle the matter quietly.

"If Ted and I had met privately, like I tried because it was a sensitive issue, none of this would have happened," Agate says. "But he immediately gets nervous and says, 'Talk to my lawyer.' Even if I'm half-right, he should have just made this go away."

Six weeks later, however, Agate dropped the bomb he'd been saving for years, letting the world know in an amended complaint that Forstmann had bet on sporting events and an IMG client. 

An important issue in Agate's 2010 lawsuit, however, dealt with the confidential settlement he signed a year earlier and whether Agate was barred from bringing nearly the same claims again as a new entity, Agate Printing.

"The settlement agreement never once mentioned Agate Printing," Agate tells the Weekly. "So what am I going to do? They beat me down, I had bills to pay, I was getting evicted at the time, I said, 'Fuck it,' I'll wait a year, and they left the window wide open."

Forstmann's lawyers argue that Agate and Agate Printing are one and the same and therefore cannot sue Forstmann separately.

As evidence, Forstmann's legal team filed a sworn statement by Beth Kropfl, Agate's personal assistant and the bookkeeper for Agate Printing during the late 1990s. Kropfl claims that Agate Printing maintained one bank account from which she wrote checks to cover expenses for both the company and Agate. She also claims that Agate did not draw a salary from Agate Printing and that she wrote $20,000 worth of checks from the Agate Printing account to Las Vegas casinos, which Agate then cashed to pay for gambling markers.