LOS ANGELES—In a lawsuit pitting two veterans of the adult entertainment industry against one another over a mainstream partnership gone sour, Todd Blatt, who used to run distributor Antigua Pictures, filed suit yesterday in Los Angeles federal court against former Mr. Jenna Jameson and Club Jenna CEO Jay Grdina, his former company, Dolce Bevuto, Inc, as well as NOHO, a Wyoming company and the name of the publicy traded anti-hangover drink that is at the center of the dispute.
The co-plaintiff in the suit is an entity called TCB Partnership, which, according to the 37-page complaint, entered into an agreement in June 2011 at the request of Grdina's Dulce Bevuto to have "the exclusive right to license and distribute all NOHO branded products in all territories worldwide, except the U.S. and Canada."
The complaint adds, "The distribution agreement was for an initial term of three years, with three successive option periods of three years each, and provided TCB a 15% percent commission on all international sales, a 10% commission for Canada sales, and 20% of all foreign licensing for manufacturing (not final products) (hereinafter the 'Distribution Agreement').
"Shortly after entering into the Distribution Agreement," it continues, "Grdina requested that TCB take on the additional roles of manufacturing NOHO’s products and filling domestic orders. Grdina did not have NOHO set up to handle the manufacturing demands of its growing domestic and international distribution and did not have adequate facilities to fill domestic orders.
"Plaintiffs agreed that TCB would also handle manufacturing and domestic distribution, in addition to international distribution," it adds. "Defendants agreed to pay for all manufacturing and domestic distribution costs and to compensate TCB’s warehouse staff for their additional labor as soon as its cash flow improved (hereinafter the 'Manufacturing Agreement')."
That deal was in play from March 2011 through October 2013, alleges the complaint. "From in or about March 2011 through October 2013," it states, "Blatt directed and managed NOHO’s foreign licensing and distribution and TCB acted as NOHO’s exclusive distributor in all territories, except the U.S. and Canada. TCB also exclusively manufactured every can of NOHO sold domestically and internationally through in or about February 2013 through its warehouse in Los Angeles County. In just over two years, Blatt’s international sales strategy took the NOHO enterprise from a domestic product distributed primarily in California and Arizona, to an international premium lifestyle beverage, today the world’s #1 selling hangover prevention supplier. Plaintiffs continued to perform and invest significant effort into building NOHO, in reliance on the promised founders’ interest."
After nine months of work, the complaint continues, "On March 26, 2012, TCB was issued 2,485,733 units of Dolce LLC, purportedly representing a 5% non-dilutable interest in the NOHO venture (the 'Dolce LLC Certificate')."
The good times were apparently short-lived. "While Plaintiffs dutifully handled all of NOHO’s manufacturing and distribution," alleges the complaint, "they were completely unaware that Defendants were secretly engaged in a scheme to deprive them of their interests in NOHO once it went public."
A mere two months later, the NOHO hit the fan. "In or about May of 2013," states the complaint, "Plaintiffs learned that Defendants had dissolved Dolce Bevuto, LLC, transferring all of its assets to a newly formed Nevada corporation, Dolce, and that 100% of Dolce had been acquired by NOHO, Inc. Plaintiffs were not notified of the dissolution, transfer or acquisition and were not reissued shares in either Dolce or NOHO following the merger.
"When Plaintiffs inquired with Grdina and [NOHO director] Stephenson about the merger and when their 5% non-dilutable interest in NOHO would be issued," it continues, "Plaintiffs were informed that their 5% interest was no longer non-dilutable and that everyone’s interests were diluted when Dolce and NOHO merged, even Grdina’s interest."
It is at this point that Blatt alleges Grdina committed perhaps his worst offense. According to the complaint, "Defendants further instructed that before any shares in NOHO could be issued to Plaintiffs they would have to a) sign a new 'lock up' agreement with NOHO for their 5% 'dilutable' interest and b) enter into a new 'non-exclusive' foreign distribution agreement with NOHO. If they refused, Plaintiffs were informed that their interests would be cancelled and the Distribution Agreement would be terminated."
The complaint further alleges that they were given a "moment's notice" to accept the new terms, and that when they "failed to do so in the unreasonable timeframe demanded, Defendants cancelled their shares in NOHO and wrongfully terminated the Distribution Agreement... As a result of their wrongful and malicious conduct," the complaint continues, "Defendants not only defrauded Plaintiffs and misappropriated the value of their hard work and expertise, reaping huge financial rewards and lucrative compensation packages from their scheme, but they seriously tarnished Plaintiffs’ reputation and business relationships in the process."
In terms of the relief being sought, "Plaintiffs seek the value of their 5% non-dilutable interest in NOHO, their unpaid and projected commissions and staff compensation—a sum to be proven at trial, but that is believed to be in excess of $5 million dollars based on the value of NOHO’s shares and past sales—as well as compensatory and punitive damages and equitable relief from Defendants for their deliberate and malicious conduct."
According to the court docket, summons were issued to the defendants today, and the court has already indicated that the parties will be required to engage in a dispute resolution process. .
The complaint can be read here.
