‘Girls Gone Wild’ Files Bankruptcy to Fight Las Vegas Debt
(Updates with company statement in sixth paragraph.)
Feb. 28 (Bloomberg) -- The company behind the “Girls Gone Wild” videos filed for bankruptcy to protect itself from a $10.3 million debt claimed by Steve Wynn’s Wynn Las Vegas LLC and a $5.8 million award won by a woman who says the company used naked images of her without permission.
Last year, Wynn and his company won a slander lawsuit against Joe Francis, founder of the “Girls Gone Wild” franchise, which features college-age women in reality TV-style shows focused on drinking, stripping and sex.
“The court finds that Francis made a knowing and intentional false and defamatory statement,” a Nevada judge ruled in April in awarding $7.5 million to Wynn and Wynn Las Vegas. Francis lied when he claimed he had proof that Wynn tricked high-end gamblers, the judge ruled.
GGW Brands LLC said it had about $16.3 million in debt and less than $50,000 in assets. Affiliates GGW Magazine, LLC and GGW Events LLC also sought Chapter 11 protection yesterday in U.S. Bankruptcy Court in Los Angeles.
The bankruptcy case doesn’t mention Francis or the lawsuit. It was signed by a company manager, Chris Dale, and listed its biggest debt as $10.3 million to Wynn Las Vegas. The company said it disputes the validity of that debt and a $5.8 million claim by Tamara Favazza.
GGW Brands filed for bankruptcy “to restructure its frivolous and burdensome legal affairs,” Francis’s executive assistant, Heather Brook, said in an e-mailed statement. She said Francis hasn’t owned the company for two years.
“This Chapter 11 filing will not affect any of Girls Gone Wild’s domestic or international operations,” according to the statement. “Just like American Airlines and General Motors, it will be business as usual for Girls Gone Wild.”
Francis has lost a series of multimillion-dollar court cases, including one in which the Nevada Supreme Court ruled he owed $2 million in gambling debt to Wynn. Francis had sought a discount on the debt and promised to pay after he was released from jail in an unrelated case, according to court records.
Favazza sued Francis in 2008, claiming someone exposed her breasts while filming in a bar in St. Louis for the “Girls Gone Wild Sorority Orgy” DVD series, according to court documents.
Favazza, a St. Louis resident, won a $5.8 million judgment and then sued Francis, GGW Brands and Mantra Films last year in federal court in Missouri to collect.
GGW Brands called Favazza’s claim a “trade debt” in its Chapter 11 petition. In bankruptcy, trade debts are owed to suppliers, vendors and other service providers.
Favazza claimed in her federal suit that Francis evaded creditors by changing the names of his businesses, transferring assets and closing accounts.
Francis owns assets that could be used to satisfy the judgment, including a 1971 Gulfstream jet worth at least $2 million, a $10 million mansion in Bel Air, California, and a $30 million beachfront estate in Punta Mita, Mexico, according to the complaint. GGW trademarks for videos, websites and clothing and apparel total more than $20 million, Favazza said.
The case is In re GGW Brands, LLC 13-15130, U.S. Bankruptcy Court, Central District of California (Los Angeles)
--Editors: Glenn Holdcraft, Stephen Farr