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New Girls Gone Wild Leader Sues Founder Joe Francis

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from www.wsj.com – Girls Gone Wild founder Joe Francis was sued Tuesday by the adult-entertainment company’s new leader, who accused him of threatening to hurt the company’s employees and said that he should be banned from its Santa Monica, Calif., headquarters, according to the lawsuit.

R. Todd Neilson, who recently took control of Girls Gone Wild’s companies, asked a bankruptcy judge to issue a restraining order that would keep Francis more than 100 feet away from company’s Santa Monica office and keep him from “calling, e-mailing, texting, faxing, threatening, or otherwise contacting” its 17 employees, according to a lawsuit filed with the U.S. Bankruptcy Court in Los Angeles.

The lawsuit came after Neilson accused Mr. Francis of making violent threats to employees on Sunday—including threats of physical harm—on the claim that some Girls Gone Wild employees “were not obeying his commands,” Neilson said in the lawsuit.

“The employees of the [Girls Gone Wild companies] believe Mr. Francis to be a violent man,” Neilson said in the lawsuit. “They are afraid to defy him and may soon seek…employment elsewhere if they are not provided a safe workplace.”

Francis’s attorney, David Houston, was in court on Wednesday morning and not available to comment on the lawsuit.

Neilson, the Chapter 11 trustee in charge of the four companies that produce and distribute Girls Gone Wild content, made his request to bankruptcy Judge Sandra Klein.

Neilson took over the companies earlier this month amid complaints that they had been improperly paying for Francis’s luxury cars and mansion stays in California and Mexico—all business expenses that company executives had argued were crucial to projecting his “bad boy” image.

Since Francis founded the Girls Gone Wild enterprise in 1998, the company has made “the phrase ‘Girls Gone Wild’ part of the cultural landscape of America in the first decade of the 21st century,” attorneys for the companies said in earlier court papers.

Francis, who spent 11 months in jail on federal tax charges, has become more of a figurehead than a controller, though he still needs to maintain the “‘bad boy’ image and playboy lifestyle make him the brand icon to customers and potential customers,” company attorneys said in court papers.

In Tuesday’s lawsuit, Neilson, an ex-FBI agent, said that Francis has also tried to block his investigation into the company’s finances, which violates the U.S. Bankruptcy Code’s automatic stay rule that blocks outsiders from “exercise[ing] control over property” of the company.

Neilson said that the court should also punish Francis with a “monetary civil sanction” of an unspecified amount, though he acknowledged that such a sanction might be difficult to collect.

“Any damages would likely not be collectable,” he said in the lawsuit. “Mr. Francis has claimed in sworn testimony to be impecunious.”

Las Vegas entertainment kingpin Steve Wynn’s resort company has been pursuing Francis since he failed to pay a $2 million gambling debt to the resort during a February 2007 trip, according to court papers. In 2012, the resort company got a $7.5 million judgment for defamation “stemming from Francis’ public attack falsely accusing Wynn of deceiving customers,” according to the resort’s lawsuit.

Girls Gone Wild’s companies—namely GGW Brands LLC, GGW Events LLC, GGW Direct LLC and GGW Magazine LLC—filed for Chapter 11 bankruptcy protection on Feb. 27 once the resorts pressed the companies to pay the judgment against Francis. The filings give attorneys for Girls Gone Wild’s companies a new court in which to argue that the company’s assets shouldn’t be used to pay debts owed personally by Francis, according to court papers.

The resort’s attorneys have disputed that Francis has distanced himself from the company. In earlier court papers, attorneys for the Wynn resort said that Francis “historically has used the [companies] as his personal ‘piggy bank’ as part of a scheme to hide his assets from his creditors.”

Soon after the resort filed those complaints, Judge Klein appointed Neilson to take over the companies. Neilson has investigated failed solar-power company Solyndra and was involved in the Mike Tyson and Death Row Records bankruptcy cases.

Ronald Tym, an attorney for GGW Brands, told Dow Jones that the company won’t appeal Neilson’s appointment but said that he expects him to take the position that Wynn’s companies shouldn’t be allowed to take money from the company to pay for Francis’s debts.

“The Chapter 11 trustee’s goals are the same as ours would be: to make the company healthy again,” Tym said.

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