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Gone In A Flash: Who Killed Girls Gone Wild?

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Gone In A Flash: Who Killed Girls Gone Wild?

The reaction was a mixture of glee and disbelief when the Girls Gone Wild franchise announced publicly that it was filing for Chapter 11 bankruptcy protection back in 2013. To many, it was incomprehensible. Girls Gone Wild enjoyed a reputation and name-recognition that few of its contemporaries could boast. Logistically, it seemed overhead was relatively low – most of the talent were paid in tank tops and trucker hats. An employee responsible for the editing of the videos alleged that, despite promises to the contrary, many staff members for the company were retained as outside consultants, working long hours and receiving neither overtime pay nor benefits. In many instances, Girls Gone Wild was paid by club promoters to come to clubs and collect film. All together, it seemed like a license to print money. So what went wrong? In two words: Steve Wynn.

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The dispute between Steve Wynn, billionaire casino owner, and Joe Francis, creator of GGW, began in 2007. After a particularly unlucky visit to one of Wynn’s casino’s, Francis found himself $2 million in the hole. Francis left Nevada acknowledging that he owed Wynn money and promising to pay him. Unfortunately for Francis, after numerous delays and one bad check, Steve Wynn’s patience ran out. In 2008, Steve Wynn filed two lawsuits against Francis: a civil suit to get his $2 million back and a criminal suit for knowingly passing a bad check. Francis quickly filed a countersuit claiming Wynn’s casino had used alcohol and prostitutes to coerce him into losing the money. The court ruled Francis owed the casino the money he had lost. For good measure, Wynn launched a defamation suit for the allegations contained in Francis’ countersuit and comments he had made to the press along the same lines.

And then things got crazy. An appearance on Good Morning America landed Francis with another defamation lawsuit after he claimed on the national broadcast that Wynn had threatened to kill him with a shovel and bury him in the desert over his outstanding debt. In 2011, Wynn won $7.5 million in his first defamation suit. In 2012, after a series of escalating lawsuits, Wynn walked away with a second judgement against Francis, worth $19 million, for the comments Francis had made on Good Morning America.

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To get his money, Wynn went after Girls Gone Wild and the corporations that ran it, only to be met with a nasty surprise. A few months after the judgement against Francis, Girls Gone Wild Brand LLC, and three other corporations responsible for the running of the franchise, filed for Bankruptcy protection. Between the $10.3 million Girls Gone Wild owed Wynn for Francis’ defamation charge and a $5.7 million suit by Tamara Favazza, who said footage of her had been used in videos without her consent, the franchise was $16 million in debt.

When creditors and litigants went after Girls Gone Wild’s now bankrupt parent corporations, many, including Steve Wynn, were surprised to find most of its assets, including the Trademarks for the Girls Gone Wild videos and apparel, were gone. The company only listed in $500,000 in capital. What’s more, Francis was no longer listed as an owner of the companies. According to documentation, Francis had given up control of GGW in 2010. But, Steve Wynn wanted his money.

Being inextricably linked to the personality of one person is a double-edged sword for any company, and it was true for Girls Gone Wild. Wynn argued to bankruptcy officials that Joe Francis was Girls Gone Wild, a comment that Francis had made many time in the past with pride. His attorneys claimed that, despite appearances, Joe Francis was still in control. Frustrated, Wynn used his influence as Girls Gone Wild’s biggest creditor to have a trustee installed as the head of Girls Gone Wild and to request a forensic audit of the company.

Former F.B.I agent and forensic accountant R. Todd Neilson, assigned to the Girls Gone Wild Bankruptcy, uncovered that shell companies, associated with the same addresses and business partners as the bankrupt corporations, were operating the franchise. He subpoenaed email records and documents to find that companies named Argyle Online LLC and Perfect Science Labs LLC, related to Joe Francis, were producing the new Girls Gone Wild content. Mantra Films, original owner of the Girls Gone Wild trademarks, had given them to an offshore company called Path Media Holding.

Neilson and his legal team filed injunctions to keep Joe Francis from exerting control over GGW through these bodies, and had the courts reverse the trademark transfer to Path Media Holdings, putting Girls Gone Wild’s greatest assets within reach of its debtors. As of the end of 2013, the courts had approved a $28 million bankruptcy settlement, most of which will go to Steve Wynn.

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There’s no doubt that Girls Gone Wild could not have gotten where it did without the charisma and determination of the man that created it. But the very traits that allowed Joe Francis to succeed in building Girls Gone Wild – his disdain for authority, his ambition and his determination – were the same qualities that led to its demise. His “playboy” ways have led to numerous accusations of sexual assault, sullying the reputation of his organization. His brash and iconoclastic attitude toward convention and authority, while of use in business, has led to disaster in the court room.

In just one example, Francis was found in contempt, and served 11 months in jail, after arriving late to his court-ordered mediation wearing flip-flops, sweats, and a backwards baseball cap, and shouting obscenities and threats at the opposing counsel (behaviour he describes as posturing and a negotiation technique). In 2011, Francis was found guilty of filing false tax returns after wrongly deducting personal expenses as business expenses. His justification? That his role as the face of Girls Gone Wild required he live the high life and flash his cash to keep up appearances. And therein lies the problem: the creator of the company is linked with the franchise to the point where the franchise has become culpable for Francis’ actions, even after legal ties have seemingly been severed. His enemies have become the company’s enemies. And it turns out Steve Wynn is a terrible enemy to have.

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