IWantClips sued by shareholder
Clip Site IWantClips Faces Lawsuit and Social Media Controversy
Femdom video sales site IWantClips, still recovering from self-inflicted crises involving model information security breaches, has now found itself involved in a lawsuit. IWantClips is claiming this lawsuit is frivolous and claims that successful businesses attract frivolous lawsuits.
What is the lawsuit against IWantClips about?
One of the shareholders of IWantClips claims he was given nearly 30% of the company as partial repayment for the interest on over $2.5 million in loans he has made to the company, and they are suing Gatsby Enterprises Inc and Paragon Development & Technology Inc over the alleged misuse of corporate funds. IWantClips is owned by an “umbrella” of companies, all of which are wholly owned by and operated by the owners of IWantClips.
The lawsuit alleges that IWC co-founders Bratty Nikki and Jay Phillips have been using IWC as their personal piggy bank, spending over $850,000 of company money on their personal expenses in 2019 (classified as “loan to shareholder” in the financial documents.) The company’s former Chief Financial Officer has submitted a declaration to the court stating that the company paid the security deposit ($43,000) and rent ($18,000/month) for Nikki and Jay’s house in an upscale Los Angeles neighborhood. Other personal expenses that were allegedly charged to the company include shopping sprees at Yves Saint Laurent, Dolce and Gabbana, Saks Off 5th, Neiman Markus, and meals at Nobu Los Angeles.
Despite gross revenues in excess of $21.5 million in 2019, the company was unable to finish the year in the black. According to financial documents submitted to the courts by Paragon’s former Chief Financial Officer, Paragon–which wholly owns Gatsby Enterprises Inc, which does business as IWC International–finished 2019 approximately $135,000 short of breaking even. This followed two years where IWC allegedly lost money, posting net losses of approximately $513,000 in 2017 and $104,000 in 2018. Payments to models allegedly came to just $14.9 million in 2019, leaving millions of dollars to cover other company expenses. While the company was allegedly losing money in 2019, they continued to splash out on promotional expenses such as IWantRadio ($53,000) and the 2019 AVN Adult Entertainment Expo ($58,000 in 2019, in addition to $21,000 already spent in 2018), recruiting employees ($54,000), and travel expenses ($27,000). The lawsuit further alleges that the plaintiff shareholder had to make an emergency loan in December 2019 to allow IWC to pay models as there was no cash on hand.
Why did this lawsuit become a controversial Twitter topic?
Former IWC model Violet Doll, who also tipped off the model community about the information breach email containing model information, tweeted out a PDF of the initial lawsuit filing, and found herself issued with a cease and desist letter from IWC’s lawyers at Novian & Novian LLP. IWantClips also posted a statement to their Twitter account (see image below).
In an effort to remain as transparent as possible with our community, please allow us to correct & clarify some of the claims @VioletDoll has made & documents she has posted based on filings made in the federal court action. pic.twitter.com/xIXBJyvnGQ
— iwantclips (@iWantClips) June 6, 2020
What does IWantClips have to say about this lawsuit?
We reached out to Jay Phillips for commentary from IWC and received a response from Adella Curry, a team member of Forward Approach Marketing. We asked if due to any pending or ongoing lawsuits, if workers or IWC Artists would have payouts impacted or delayed due to the alleged claims that there were plans to “send the team on vacation,” in response they said: “No. This is completely false. We employ over 30 teammates and exactly 3 inquired about vacation time, specifically if it was available as an option to avoid possible exposure during the Covid-19 pandemic. This vacation time was initially granted and then we moved the entire office to remote status in compliance with essential work recommendations. Therefore, none of our teammates had to use any vacation time to avoid exposure, and each was able to continue working from the safe confines of their homes.” We followed up by asking if ongoing or pending lawsuits against IWC or its umbrella of parent companies (Gatsby Enterprises Inc and Paragon Development & Technology Inc) would impact business for clip artists using IWC, to which they responded: “No. None of the platform functions have been or will be compromised by the lawsuit. To be clear, IWC is only involved in one lawsuit, which is a shareholder dispute and is close to being resolved amicably without the need for further litigation. It does not involve any artists or teammates. iWantClips and each of its properties are up and running, all payouts to artists are on schedule, and there have been and will be zero interruptions as a result of the current lawsuit. It is unfortunate, but successful businesses and persons attract frivolous lawsuits. Anyone can file a lawsuit, but that does not mean the allegations in the lawsuit are true. In the current case, for instance, the court has already ruled in our favor and found there was no need for immediate relief as requested by the plaintiff. Based on the advice of our legal counsel, we will refrain from further comment at this time. However, we note that lawsuits are often used tactically in support of hidden agendas. We urge anyone who is concerned by the allegations to wait for the judge’s decision, and to perform their own due diligence.”
Please note that many of the claims above are alleged unless stated otherwise, and have not been proven in a court of law. The documents that we referred to in preparing this article are publicly available through the California Central District Court. Out of respect for the privacy of individuals in sex work, we have chosen to refer to both Bratty Nikki and Jay Phillips by their stage names in this article. All commentary from Adella Curry acting as the representative for IWantClips took place on June 8th, 2020 and may not remain accurate as time passes.