Nicklaus NIL Ruling Holds Important Lessons for Bankruptcy IP

GBI Services sold its interest in legendary golfer Jack Nicklaus’ name, image, and likeness at a Chapter 11 bankruptcy auction for $35.7 million this month. The deal was part of a comprehensive global settlement between the family office’s owner, Howard Milstein, and Nicklaus.

Judge Craig Goldblatt’s federal bankruptcy rulings in the last few months are the final episode in a years-long dispute between Nicklaus and Milstein.

The court’s treatment of Nicklaus’ NIL rights could foreshadow an increased willingness to treat NIL as collateral, by both lenders and judges, which in turn, may result in more disputes with celebrities.

A Complex Dispute

A $50 million defamation award to Nicklaus prompted GBI’s Chapter 11 filing last fall in the US Bankruptcy Court for the District of Delaware.

GBI had a nonexclusive license to use Nicklaus’ NIL, but the two parties disagreed on whether GBI could use its interest in Nicklaus’ NIL rights as an asset in bankruptcy. In January, Goldblatt approved debtor-in-possession financing that included a lien on GBI’s interest in the NIL, over Nicklaus’ objection.

Nicklaus objected based on a ruling in a prior noncompete lawsuit in New York state court. In that lawsuit, GBI argued it had an exclusive license to Nicklaus’ NIL, enforceable even against Nicklaus, effectively creating a permanent noncompete. The court dismissed GBI’s complaint in March 2025, holding that GBI didn’t have an exclusive right to Nicklaus’ NIL and that Nicklaus was “free of restraints to pursue his own business interests as he sees fit.”

Nicklaus argued that he therefore had the right to terminate GBI’s license or veto its transfer, and a lien would interfere with that right. The lien also may have worried Nicklaus because Howard Milstein controlled the debtor-in-possession financing lender.

If GBI (controlled by Milstein) had defaulted and the lenders (controlled by Milstein) had used their lien to limit Nicklaus’ control over his NIL, Nicklaus could have lost some of his hard-fought NIL rights to the man he won them from after years of litigation.

Goldblatt, however, indicated his ruling had no bearing on GBI’s rights to Nicklaus’ NIL. Meaning that if Nicklaus could exercise valid termination rights, the lien’s value could quickly vanish.

The Chapter 11 auction presented an opportunity to litigate that exact issue, but despite initially objecting to the NIL transfer contemplated by the auction, Nicklaus eventually chose to purchase the NIL rights as part of the settlement.

Right of Publicity

The concept that celebrities have a right of publicity—that is, a right to control the commercial use of their NIL—was first recognized in 1953. While many states have passed publicity rights legislation, rules often conflict from state to state or are incomplete. There is no federal publicity right and, despite the media’s recent focus on NIL, it doesn’t appear that there will be one soon.

NIL gained more public interest in 2021 when the US Supreme Court ruled in NCAA v. Alston that the association’s restriction on student-athlete compensation violated the Sherman Act. The NCAA responded by allowing student athletes to profit from their NIL, which inspired a wave of new state legislation and a proposed federal law (the SCORE Act) regulating college athletes’ NIL rights.

House leadership canceled a vote on the SCORE Act in December and even if the House had passed the bill, it likely would have struggled in the Senate. So, it is unlikely that Congress will pass unifying NIL legislation soon. Without national legislation, NIL owners and lawyers will need to track federal court cases like this one carefully to predict how federal law will treat NIL rights.

Key Takeaways

Goldblatt isn’t the first bankruptcy court to treat intellectual property as an asset in bankruptcy, but this may be the first bankruptcy case where a lien was granted on contested NIL and where the debtor then sold the contested NIL at a Chapter 11 auction.

As NIL becomes more prominent in the national conversation, Goldblatt’s treatment of Nicklaus’ NIL could further legitimize NIL’s status as valid and transferable property.

Creditors and debtors may start to more regularly use NIL as collateral, and NIL rights could become more appealing to institutional investors. This could benefit celebrities with valuable but non-liquid NIL rights by allowing them to generate liquidity without fully transferring their rights to a third party.

This case also highlights how important it is that celebrities who do sell their NIL rights have strong contractual protection. Even if a celebrity trusts the person or company they sell their NIL rights to, they should be aware that if that person or company files for bankruptcy, there is a risk that their NIL will be sold to the highest bidder and used by an entity that the celebrity doesn’t know or trust.

As long as the NIL regulatory landscape remains inconsistent, NIL rights may not be as appealing to lenders as other forms of intellectual property, such as patents, which have well-defined procedures for perfecting security interests. Even where certain rights are questionable, bankruptcy judges’ willingness to entertain disputed claims can still, as it likely did here, influence settlement outcomes.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Schuyler Carroll is a partner at Manatt focusing on complex bankruptcy proceedings and acting as a trusted adviser across various distressed transactions and litigation-related matters.

Leo Houts is a law clerk at Manatt who focuses on complex litigation, intellectual property, and regulatory matters.

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