In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, takes a look at the potential liability and litigation risks surrounding celebrity-branded companies in light of the recent litigated dispute that has arisen between golfing legend Jack Nicklaus and the company he founded. I would like to thank Sarah for allowing me to publish her article as a guest post on this site.
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When public figures become brand figureheads, novel D&O underwriting considerations may arise. As celebrity brand launches continue to increase, there may be potential for a wave of future claims akin to those made between legendary golfer Jack Nicklaus (Nicklaus) and Nicklaus Companies LLC (Nicklaus Companies), the sporting gear and golf course design company he founded.
D&O Diary readers may recall, I previously discussed D&O exposures stemming from the increase in defamation lawsuits. To that end, Nicklaus Companies recently filed for bankruptcy protection after a jury returned a $50 million defamation verdict against the company in a lawsuit brought by its founder and namesake. The Delaware bankruptcy judge overseeing Nicklaus Companies (referred to as GBI Services) recently gave the company permission to tap $10 million in Chapter 11 financing, even though counsel for Nicklaus said he was disputing the bulk, $462 million, of the company’s debts.
The following will discuss Nicklaus’ defamation lawsuit, and the pending Nicklaus Companies bankruptcy may provide an example of how defamatory or false corporate statements can financially impair a celebrity-branded company. Certainly, there may also be D&O claims that arise from Nicklaus’ defamation case against Nicklaus Companies; however, this post will examine D&O risks that may stem from the financial impairment that can occur when a company’s core assets are tied to the name, likeness, and reputation of a public figure.
This post further examines the follow-on D&O claims that may be brought by the Bankruptcy Estate, Trustee, or Creditors against a celebrity-branded company and its directors and officers, including allegations of breach of fiduciary duty and mismanagement, particularly if corporate strategy includes allegedly maligning the celebrity founder or figurehead.
Nicklaus Litigation and Nicklaus Companies Bankruptcy
In his defamation lawsuit, Jack Nicklaus alleged that Howard Milstein, Andrew O’Brien, and Nicklaus Companies LLC engaged in a coordinated campaign of defamation and unfair competition designed to damage Nicklaus’ reputation and undermine his ability to compete in golf-course design and endorsement work. In 2007, Nicklaus and his entity, GBI Investors, Inc. sold the exclusive rights to his golf course design, commercial endorsements, and publicity rights to Nicklaus Companies at a sale valued at around $145 million, which included Nicklaus signing a non-compete.
Nicklaus claimed that Nicklaus Companies inserted knowingly false allegations into a 2022 New York lawsuit seeking to enforce his non-compete, particularly that Nicklaus sought a leadership role with the Saudi-backed LIV Golf League and had to be “saved from himself.” Nicklaus alleged that the Nicklaus Companies republished those statements to national media outlets, clients, and industry contacts to embarrass Nicklaus and chill his business prospects. Nicklaus further alleged that O’Brien falsely told third parties that he suffered from dementia. Nicklaus alleged that these statements werepart of a broader effort by Nicklaus Companies to retain control of the Nicklaus brand and harm Nicklaus as he attempted to re-enter the market independently.
In October 2025, after a three-week trial, the jury hearing Nicklaus’ defamation claims returned a verdict finding Nicklaus Companies liable for defamation. The jury determined that Nicklaus Companies made false claims against Nicklaus regarding his attempt to join LIV to damage his reputation. The jury attributed 100% of the damages to the company and awarded $50 million in compensatory damages. Nicklaus Companies disputed the verdict and indicated that it intends to explore an appeal.
A month after the jury returned its verdict in Nicklaus’ favor, Nicklaus Companies filed for bankruptcy with more than $500 million of estimated liabilities. The Nicklaus Companies petition identifies itself and more than a dozen affiliated entities spanning golf-course design, real estate licensing, brand management, equipment, and international operations, as Chapter 11 debtors seeking joint administration. According to the petition, Nicklaus Companies estimates more than $500 million in liabilities and between $500 million and $1 billion in assets, with more than 1,000 creditors.
Discussion
The bankruptcy of Nicklaus Companies, coming on the heels of the $50 million defamation verdict against it, underscores how intertwined corporate governance risk may become with personal-brand risk when a celebrity’s identity is the enterprise’s primary commercial asset. Such risk may, in turn, result in significant D&O underwriting exposure.
Notably, the public-facing disputes between Nicklaus and Nicklaus Companies LLC may provide support for bankruptcy-estate claims asserting that insiders failed to act in the best interests of the company, mismanaged the brand assets, or allowed personal or strategic conflicts to escalate into value-destructive litigation (the 2022 lawsuit seeking to enforce Nicklaus non-compete).
Thus, for D&O underwriters of celebrity-driven enterprises, the Nicklaus defamation lawsuit and Nicklaus Companies LLC bankruptcy may demonstrate that even traditional corporate decision-litigation strategy, publicity messaging, and oversight of licensing agreements can carry outsized consequences if they implicate the celebrity’s reputation or brand. In the case of Nicklaus and Nicklaus Companies, the defamation litigation and subsequent verdict may be traced to executive misstatements or strategic communications that may have eroded brand value and precipitated insolvency.
D&O carriers may also want to consider whether allegations of false statements made by corporate executives about the company’s own founder create conflicts between the entity and the individual insured, complicating indemnification, allocation, and Side A exposure. Will such allegations put a company and a celebrity-insured in directly adverse positions, raising questions about whether the entity can, or should, indemnify executives whose statements allegedly harmed the company’s primary commercial asset? These dynamics may require D&O underwriters to consider mixed-capacity conduct and competing defense demands, including a potential shift of exposure to Side A.
Finally, Nicklaus Companies’ bankruptcy filing, with liabilities exceeding $500 million, may be heavily scrutinized considering the valuation and management of the Nicklaus brand and the company’s extensive licensing activities. The trustee may ask whether Nicklaus Companies properly safeguarded purchased intellectual property rights, whether they made decisions that foreseeably led to reputational collapse, and whether the Nicklaus litigation strategy to enforce Nicklaus’s non-compete constituted mismanagement.
Nicklaus versus Nicklaus Companies highlights a confluence of risks unique to celebrity-anchored companies that D&O underwriters of such risks may want to consider – personal-brand devaluation as a corporate loss, disputes over control of publicity rights, and governance failures that may simultaneously harm the individual figurehead and the entity. When such risks result in corporate bankruptcy, as was the case with Nicklaus Companies, the follow-on D&O underwriting exposure may be significant.
The views expressed in this article are exclusively those of the author, and all of the content in this article has been created solely in the author’s individual capacity. This article is not affiliated with the author’s company, colleagues, or clients. The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.