Promoter Don King's iron grip on the four heavyweight title belts took a huge hit Friday when a U.S. bankruptcy judge invalidated Hasim Rahman's promotional contract with King and allowed Rahman to sign with rival promoter Bob Arum of Top Rank.
Rahman, who was elevated from interim titlist to full WBC titleholder upon Vitali Klitschko's knee injury and subsequent retirement, filed for Chapter 11 bankruptcy protection on Oct. 4, citing debts of more than $5 million (including $2.1 million to the IRS).
King still promotes the three other titleholders -- Chris Byrd, John Ruiz and Lamon Brewster -- although his hold on Byrd is tenuous because they are fighting in court.
Despite a strong objection from King, Nevada District U.S. Bankruptcy Judge Bruce A. Markell threw out Rahman's contract with King and validated a proposed contract with Top Rank that was before the court.
"They prevailed. Top Rank has the contract. But be careful what you wish for," King attorney Judd Burstein told ESPN.com on Friday night. "Don King will still be one of Rahman's largest creditors, and we will file another motion with the court next week asking that a significant portion of his purse [for an upcoming fight with James Toney] be held by the bankruptcy court."
Rahman manager Steve Nelson said that Rahman got what he hoped for -- to be separated from King, with whom he has had a poor relationship in recent years, and to be with Arum.
"We succeeded in everything we wanted to do before the court," Nelson said. "It was a knockout for Hasim Rahman. The two big issues were that the court officially rejected the Don King contract. That was expected. The battle was going to be Don's objection to us completing a new agreement with Top Rank. We recommended a new promoter for Rock, which we had to get court approval for. The result is that Hasim Rahman is now promoted by Top Rank and that he can go on with his career and prove he is the best heavyweight in the world. Top Rank is back in the heavyweight business."
In addition, Nelson said that Rahman, 33, beat King on two other issues: Markell refused to assign Rahman's managerial contract to Monarch Sports, which is run by Carl King, Don King's stepson; and King's request to have a trustee oversee Rahman's finances was denied.
"Don is very upset, I'm very upset. I don't understand why this happened," Burstein said. "That's the court's decision, but Don is very unhappy."
Markell, taking into account the fact that Rahman preferred to be with Top Rank over King, decided that the offer from Top Rank was better and instructed him to take it.
Top Rank was one of Rahman's 20 or so creditors. Part of the deal is that the $150,000 debt, from an advance Top Rank gave Rahman prior to the Nov. 12 fight with Klitschko being canceled, will be forgiven.
King's deal with Rahman, according to Burstein and Nelson, called for a $500,000 minimum purse per bout but with no element of profit sharing. King had also offered $3.5 million for a mandatory defense against Toney, a fight that is expected to happen around March.
Arum, who signed Rahman through 2009, promised a minimum purse of $1.65 million per bout against 70 percent of the profits from any promotion. If Rahman loses to Toney, he will still get a minimum purse of $500,000.
In addition, Top Rank will give Rahman a $500,000 advance so he can operate during bankruptcy.
Much to King's surprise, and to the surprise of the boxing industry, Top Rank beat King for the right to promote Klitschko-Rahman at a purse bid, putting the company back in the heavyweight business in a serious way for the first time since the heyday of George Foreman's 1990s comeback.
"When I made that bid on Klitschko-Rahman, it was because they were the two most recognized names in the division," said Todd duBoef, president of Top Rank and Arum's stepson. "Now Klitschko is retired and Rahman is the most recognized name in the division, and he has a title. When we were promoting the Klitschko-Rahman fight, the heavyweights got back into our blood. Now, we just want to make good, old heavyweight fights."
It was during the promotion for the Klitschko fight that Rahman and Top Rank got to know each other. Nelson said he and Rahman wanted to be with Top Rank, in part, because of how well they were treated.
"Top Rank treated us like gentlemen and with total professionalism," Nelson said. "There will be disagreements, but they will be normal disagreements. With Don it was emotion and vilification. When there were differences, they were dealt with irrationally. If there is a disagreement now, we don't anticipate being hit with a lawsuit, which is kind of where the final straw came from with Don.
"When we said we wouldn't accept what Don wanted after the Klitschko purse bid, we tried to negotiate with him. He wanted 50 percent of Rock's purse. There was no negotiation. When we said no, they filed suit the next day, and the day after that Rock filed for bankruptcy. We don't anticipate that kind of relationship with Top Rank. Top Rank is excited about being back in the heavyweight business. I think they're looking forward to promoting Rock. We have a promoter who cares and wants us to win. Don didn't care because he had both sides of the fight all the time."
DuBoef said King made a serious strategic error in going so hard after Rahman's purse for the Klitschko fight.
"He made Rahman a free agent by forcing him into bankruptcy," duBoef said. "I wasn't poaching on King's fighter. There was an asset in bankruptcy and we felt we could maximize the revenue for ourselves and for Rahman. Simple as that."
Nelson said the main reason they wanted to leave King was because they felt certain demands in the King contract were unfair.
"One of the biggest problems that we had with the Don King contract is the fact that they wanted us to waive all of our rights to seek relief on prior breaches of contract," Nelson said. "Going back as far as the second Lennox Lewis fight [in 2001], there were still open issues. So that was an issue that was insurmountable. We also have with Top Rank a profit-sharing deal. We have 70 percent and they have 30 percent. King didn't offer any sort of profit sharing. King did offer us $3.5 million for the Toney fight but we're taking the position that we will do better under the Top Rank profit-sharing deal."
King could still gain the rights to promote Rahman-Toney at a purse bid, which has been called for Dec. 20 in Cancun, Mexico, where Rahman will also receive his title belt.
A purse bid is called for when the two sides are unable to make a deal for a mandatory fight. The promoter offering the most money for the bout wins the right to promote it.
Usually, a mandatory fight gives 75 percent of the money to the champion and 25 percent to the challenger. However, the WBC ruled this week that Rahman-Toney would be a 60-40 split. Rahman (41-5-1, 33 KOs) had asked for the traditional 75-25 split and Toney, co-promoted by King and Dan Goossen, asked for a 50-50 split.
"If Arum wins the purse bid, he won't take a piece of the purse," Nelson said. "And we think in the long run Top Rank can generate more revenue for us than Don King can."
This isn't the first time Rahman has switched promoters under a hail of controversy.
After knocking out Lewis to win the title in 2001, he left promoter Cedric Kushner to sign with King, who wooed him with a duffel bag full of cash.
Nelson said nothing like that would happen again.
"This," Nelson said, "is the promotional contract that will take Rock to the end of his career."
Dan Rafael is the boxing writer for ESPN.com.