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The Gooch is Suing Penthouse’s Marc Bell

WWW- Penthouse Magazine founder Bob Guccione is suing Boca Raton investor and Penthouse CEO Marc Bell [pictured] in federal court in New York.

Guccione’s suit alleges breach of contract, fraud, frivolous bankruptcy filings and conspiracy, among other charges.

Bell and former Penthouse executives Dr. Fernando Molina, Daniel C. Staton, Jason Galanis and Charles Samel conspired “to divide the spoils of the reorganized company amongst themselves after depriving Guccione of all of his rights and assets,” Guccione’s complaint alleges. In addition, the complaint accuses Bell’s Penthouse Media Group of reneging on its severance payment to Guccione with co-defendants Internet Billing Company LLC, of Deerfield Beach, and Penthouse International serving as corporate vehicles to accomplish that.

Defense attorney Ron Terenzi characterized the lawsuit as an attempt by Guccione to get back a consulting deal that he had originally turned down.

“We originally sued Guccione in bankruptcy court,” Terenzi said.

Bell, the 38-year-old managing partner of Boca Raton-based Marc Bell Capital Partners, became chairman and CEO of Penthouse after buying a majority stake in the magazine in 2004 at a bankruptcy sale. Since then, 32 local jobs have been created.

“During the bankruptcy, [Guccione] cut a deal with all the creditors,” Bell said. “He reneged on the deal. It’s all nonsense.”

“When we were first putting a [reorganization] plan together to take over Penthouse, [Guccione] was allied with our position,” Terenzi said. “We were going to offer him a consultant agreement, then he withdrew his support.”

“We are confident in the claims we brought on behalf of Mr. Guccione,” said Guccione’s New York attorney, Jamie M. Brickell of the law firm Pryor Cashman Sherman & Flynn LLP. He declined further comment.

The suit moved in January from the New York Supreme Court to U.S. District Court for the Southern District of New York after Guccione asserted a claim for payment of severance benefits, which is governed by the Employment Retirement Income and Security Act (ERISA).

The Business Journal in January reported Penthouse had moved its back office operations from New York into a 50,809-square-foot building that Bell owns in the Arvida Park of Commerce.

The Business Journal reported in 2005 that Bell; Interactive Brand Development (IBD), a minority Penthouse owner and media holding company in Deerfield Beach; and PHSL Worldwide, the Mexican publisher of Penthouse, which had a majority stake in IBD, rallied together to take over the magazine empire in a bargain-basement sale, leaving Guccione out of the ownership mix.

After misreports about who owned the magazine, Bell’s Penthouse Media sent out a press release saying it now owns the magazine and isn’t the subject of the SEC action.

In a 2003 restructuring, reportedly approved by bondholders, Guccione, his two sons and a daughter were cut loose.

But, before Guccione left, PHSL allegedly improperly booked $1 million in first quarter 2003 revenue, according to the Jan. 24 SEC civil injunction. That litigation release cited Bell’s co-defendants in the most recent law suit, Samel and Galanis, as having “prepared and filed the false Form 10-Q, and they did so knowing or recklessly disregarding that Guccione had not seen or approved it.”

The SEC filed and settled a separate cease and desist order against Guccione related to the alleged Sarbanes-Oxley violations.

“We fought them. They never could come up with the money,” Terenzi said of Guccione and his business entity, General Media, the predecessor of Penthouse Media Group. “We have a suit against him as head of Penthouse. They sold a whole scheme of things that they were going to create this empire and everyone would be in a bed of roses. It was a pipe dream.”

But Guccione’s preliminary statement, made in conjunction with his attorney in his complaint, stated that the Penthouse founder began as an upstart challenger in the world of men’s publications and ended up building a multimillion-dollar empire.

“Now, years later, he has seen that empire destroyed, and he seeks, by this action, to collect damages from the individuals and companies whose machinations contributed to his decline.”

The New York Post reported Feb. 4 that Guccione had turned over the keys to his $25 million Manhattan townhouse after missing payments on a loan to Laurus Capital, which had let him live there after he defaulted on a previous loan. He was reportedly staying with relatives in Texas.

 

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