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Message
re: 'Fixer Upper's' Chip Gaines sued by former business partners for fraud
Posted on 4/28/17 at 10:42 am to thelawnwranglers
Posted on 4/28/17 at 10:42 am to thelawnwranglers
quote:
but the business being featured in a tv show is material.
The business is not featured in the show.
1
Posted on 4/28/17 at 10:44 am to Mo Jeaux
quote:
Mo Jeaux
did investor know about tv deal at all?
Posted on 4/28/17 at 10:44 am to thelawnwranglers
quote:
I don't know what he did, but the business being featured in a tv show is material. He presumably worked for that business on investor behalf including himself. If the contract was signed 2 days afterwards it was in the works.
Again I don't know the details, but I could a scenario where a suit was necessary.
If I had to guess, Lewis and Clark were the money side, Gaines was the GC, and then they had one agent that bought and sold the properties they flipped. So Magnolia the company really wasn't anything, thats why those two sold for what they did. They were only selling the name. Whatever the company was worth, most likely Gaines was a huge portion of its net worth as he was the guy doing the work.
I'm not a Gaines fan fwiw, I could not care less what happens here.
Posted on 4/28/17 at 10:45 am to thelawnwranglers
quote:
did investor know about tv deal at all?
Did his former partners ask about it? Again, you're confusing the realty business with their other businesses.
Posted on 4/28/17 at 10:45 am to Mo Jeaux
quote:
The business is not featured in the show.
don't watch it - I assumed they were in the shop some
Posted on 4/28/17 at 10:46 am to Mo Jeaux
I'd love to see that valuation argument. "Chip, thanks for your $2500 offer. However, based on that HGTV deal, which may or may not lead to a show, which may or may not become successful, which may or may not become one of the hottest HGTV shows of all time, which may or may not lead to you and your wife's large social media following, which may or may not then influence our realty business for the better, we believe the valuation should be 25x."
there's a reason you're not a lawyer...you have absolutely no idea what fiduciary duties are. They exist. They are enforced. They are the subject of many disputes just like this one.
there's a reason you're not a lawyer...you have absolutely no idea what fiduciary duties are. They exist. They are enforced. They are the subject of many disputes just like this one.
Posted on 4/28/17 at 10:46 am to thelawnwranglers
quote:
don't watch it - I assumed they were in the shop some
They are in their shop some. I don't believe they discuss the realty business. I could be wrong though.
Posted on 4/28/17 at 10:48 am to Ex-Popcorn
quote:
there's a reason you're not a lawyer
I am a lawyer, doofus.
quote:
.you have absolutely no idea what fiduciary duties are. They exist. They are enforced. They are the subject of many disputes just like this one.
So, what were the fiduciary duties here, and how were they breached?
Posted on 4/28/17 at 10:49 am to Mo Jeaux
quote:
Did his former partners ask about it?
again don't know details of case so you maybe right, but this statement doesn't really matter depending on details.
look a fiduciary responsibilities noted by other poster
I don't ask Exxon if they made money, but expect to get dividends all the same. Again don't know details and relationship if business so you could be right. Just think this statement is going wrong direction.
Posted on 4/28/17 at 10:50 am to RedRifle
Only issue I have with this is the uber-fundamental Christian vibe they put off. My wife read Joanna's book, and I thumbed through a bit of it after she was done. The Gaines are very much like the Joel Osteens in terms of seeing Christianity and God as a means to building financial wealth.
Speaking of, I can't imagine what their net worth is now. It has to be well over $100 million.
Speaking of, I can't imagine what their net worth is now. It has to be well over $100 million.
Posted on 4/28/17 at 10:52 am to Mo Jeaux
quote:
They are in their shop some. I don't believe they discuss the realty business. I could be wrong though.
they are arguing over the realty business or shop?
ps I don't really care don't know facts don't care. I just replied initially because it appeared people thought there was no way they could have screwed investors. Who knows if they did.
Posted on 4/28/17 at 10:53 am to thelawnwranglers
quote:
again don't know details of case so you maybe right, but this statement doesn't really matter depending on details.
look a fiduciary responsibilities noted by other poster
Look, we're all speculating here. However, in any buyout contract, there are what are called "big boy" provisions, which basically provide that the sellers have been given the opportunity to ask questions of the buyer, and that the buyer may have information in respect of the transaction that the sellers do not." Now, that doesn't mitigate fraud. I don't know if Chip hid anything about the show or not. However, you and fiduciary boy seem to imply that Chip knew the show would become massively successful and hid that knowledge from the sellers. That's beyond ridiculous.
Posted on 4/28/17 at 10:53 am to StringedInstruments
quote:
seeing Christianity and God as a means to building financial wealth.
that is a turn off
Posted on 4/28/17 at 10:54 am to StringedInstruments
quote:
Only issue I have with this is the uber-fundamental Christian vibe they put off. My wife read Joanna's book, and I thumbed through a bit of it after she was done. The Gaines are very much like the Joel Osteens in terms of seeing Christianity and God as a means to building financial wealth.
Yeah, their outspoken faith creeps me out a little.
Posted on 4/28/17 at 10:54 am to Mo Jeaux
quote:
So, what were the fiduciary duties here, and how were they breached?
I'm no lawyer but the basic B-law classes at LSU taught anyone not asleep in Breaux's class that you cant frick over business partners like that and not expect a valid lawsuit.
If Chip knew they were about to get rich and intentionally withheld information when negotiating that payoff, this law suit is legit and should be decided in court. End of story.
This post was edited on 4/28/17 at 10:55 am
Posted on 4/28/17 at 10:56 am to mikelbr
quote:How would he know this?
If Chip knew they were about to get rich
quote:He was running a small real estate company. His tv deal likely wasn't part of that business, though an argument could be made otherwise depending on the details and facts that we don't know.
you cant frick over business partners
This post was edited on 4/28/17 at 10:59 am
Posted on 4/28/17 at 10:57 am to mikelbr
quote:
If Chip knew they were about to get rich and intentionally withheld information when negotiating that payoff, this law suit is legit and should be decided in court. End of story.
"Your honor, he knew that the contract for a pilot television show with HGTV would in five years' time become more massively successful than anyone could imagine and lead to immense financial success that would in turn affirmatively influence our realty business and increase our wealth." They should sue Chip for not giving them the winning lottery numbers too.
This post was edited on 4/28/17 at 10:58 am
Posted on 4/28/17 at 10:57 am to Ex-Popcorn
The timeline is troubling for the Gaines family (if true):
April 26, 2013 - Chip approaches the other two about purchasing their interest ("there are no assets" - Chip Gaines).
April 28, 2013 - Chip sends message to Lewis: "I’d be scared to see how this would work if it [Magnolia Realty] was worth something…. The only thing I have to have is magnolia when the dust clears.”
April 29, 2013 - Chip filled out and signed Texas Secretary of State Form 424 deleting Lewis and Clark as members (before the agreement is made).
May 1, 2013 - Chip told Lewis that he would buy Lewis’and Clarks’ownership interest and wanted to move quickly.
May 1, 2013 - Chip's employee wrote to Clark saying that the transfer of ownership of Magnolia Realty needed to be completed by May 6, 2013.
May 6, 2013 - purchase completed.
May 8, 2013 - Chip announces HGTV show, stating that the contract was finalized three weeks earlier (i.e., before he approached Lewis and Clark to buy their interests).
May 23, 2013 - Pilot airs. It had been filmed in 2012.
And, to be clear, it doesn't matter that the show was not contracted for "magnolia." What matters is that Chip knew that the Gaines company--no matter what it was called--would necessarily profit from the show.
April 26, 2013 - Chip approaches the other two about purchasing their interest ("there are no assets" - Chip Gaines).
April 28, 2013 - Chip sends message to Lewis: "I’d be scared to see how this would work if it [Magnolia Realty] was worth something…. The only thing I have to have is magnolia when the dust clears.”
April 29, 2013 - Chip filled out and signed Texas Secretary of State Form 424 deleting Lewis and Clark as members (before the agreement is made).
May 1, 2013 - Chip told Lewis that he would buy Lewis’and Clarks’ownership interest and wanted to move quickly.
May 1, 2013 - Chip's employee wrote to Clark saying that the transfer of ownership of Magnolia Realty needed to be completed by May 6, 2013.
May 6, 2013 - purchase completed.
May 8, 2013 - Chip announces HGTV show, stating that the contract was finalized three weeks earlier (i.e., before he approached Lewis and Clark to buy their interests).
May 23, 2013 - Pilot airs. It had been filmed in 2012.
And, to be clear, it doesn't matter that the show was not contracted for "magnolia." What matters is that Chip knew that the Gaines company--no matter what it was called--would necessarily profit from the show.
Posted on 4/28/17 at 10:58 am to Mo Jeaux
quote:
Look, we're all speculating here.
Agreed I am completely ignorant to details - initial reply was misinformed counter argument to what appeared misinformed no way they did it in all honesty
quote:
However, in any buyout contract, there are what are called "big boy" provisions, which basically provide that the sellers have been given the opportunity to ask questions of the buyer, and that the buyer may have information in respect of the transaction that the sellers do not."
Good to know - I am learning something
quote:
Now, that doesn't mitigate fraud. I don't know if Chip hid anything about the show or not.
This was my point what was the agreement regarding goals of business, and did Chip negotiate material benefical deal for business. Hide that from investor and buy out at lower valuation. I don't know. Court will decide.
quote:
However, you and fiduciary boy seem to imply that Chip knew the show would become massively successful and hid that knowledge from the sellers. That's beyond ridiculous.
I am very clear I am very ignorant to circumstances of case, and not a lawyer. Just willing to consider there is a chance they defraud investors. Just as likely they were successful and someone is trying to sue for profit.
Posted on 4/28/17 at 10:59 am to mikelbr
I would seriously lick Jo's a-hole...
Sue that Lewis and Clark
Sue that Lewis and Clark
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