In an exclusive interview with AVN.com, Jill Kelly for the first time on Thursday discussed the state of Jill Kelly Productions, which last week filed for Chapter 11 bankruptcy protection, her plans and her view of recent developments.
The former president of JKP also addressed rumors about former CEO Bob Friedland and her new company Bad Influence. Kelly officially resigned in March, but has recently been working for free to help JKP repay its debts. She says "it's the right thing to do."
Kelly is working closely with new CEO Philip Starr, who this week was subpoenaed by the U.S. Department of Justice to testify before a federal grand jury about dealings by former management.
AVN: How have you been?
JK: I've been great. I love some of the stuff I've heard, it's pretty funny. Some rumors suggest that I am collecting a $5,000 dollar a week paycheck right now. I haven't been getting any money and there was a lot of money being brought in. When I was paid from JKP my so-called fat paycheck, Bob said it was a conflict still receiving Jill Kelly web money for myself, so I had to turn it over to JKP. So half my check was money that I made from my site, so things are not as they seem until you know all the facts. So I've basically been paying to work here for months.
A: What can you say about what has happened in recent months with JKP?
J: In my opinion, the [former] CFO [Ron Stone] wasn't doing his job. He wasn't doing a lot of things. [Former CEO] Bob [Friedland] made a lot of bad business deals (and a lot of good ones too) and he used to always complain about not getting reports. And you have to have checks and balances to remain profitable, that is true. There was always a power struggle between Bob and Ron. If Bob asked for this, he would do that. There was a lot of exorbitant spending, a lot of money missing that never even made it to JKP. Things were going this way and that way, and this way and that way. I never studied the business side of being public. I stayed on the creative side until recently.
I should've asked a lot more questions right from the start. I didn't even know about how much we owed in taxes. I could barely even get a sales report. ... Then I started doing my homework about [being a publicly traded company] and started educating myself.
... Once I fired the CFO [in February], no one wanted to do it. There were so many people lying and backstabbing. For a while I didn't say anything, I just sat back watching all these evil people stab each other in the back. I've been uncovering all the bad business decisions, all the bad deals. [Former Chief Operating Officer] Dan [Ice] raped the company in his few months in control. I recently found out that $50,000 in computers and software was missing. It doesn't surprise me. A lot of people that were around here didn't do shit, just collected a paycheck. The cleaning crew just quit. Bob and Dan didn't even pay them. They hadn't been paid since March, and it was $695 a month bill. The people that were in control of the money... it's disgusting. Dan in his reign of power didn’t pay the printer, the duplicator, replicator, the rent. There was almost nothing left. He [Ice] didn't pay for shit, except himself and other personal people that have nothing to do with maintaining day-to-day operations to keep the doors open.
... IVD bought the factor. We owe the factor like $380,000. ... So that’s why we had to file Chapter 11. It’s the only way I know how to try to make things right. I feel responsible. I should've educated myself a lot more rather than just be on the creative side, so I take full responsibility.
A: How did your involvement change earlier this year?
J: Back in October was my first confirmation that things were not right, but it was probably the final straw when Dan Ice said Bob had taken $1.5 million for himself. I know it's Dan's fiduciary duty to report this, but he didn’t and he had done some things I felt were inappropriate so I couldn’t trust him. I then confronted Bob. Bob denied it and then the board was informed and Dan denied ever saying it. Liar.
J: I wanted a new independent board, with no friends of Bob, and I would remove myself. When I gave my first resignation, a 30-day notice, I found out I had a no-compete clause. I felt like a prisoner. I wasn't getting paid, and it was like I was being held prisoner. ... Now after a long battle, Philip Starr and I came back in and we agreed to piggy-back my new company Bad Influence on JKP and try to unbury this and try to repay all the vendors. Philip Starr has been helping me, educating me on what's right. For sometime... We're just going to put out JKP comps, and JKP will make the distribution fee off new releases from Bad Influence. It's probably going to be a much smaller place. We'll be downsizing completely, and will cut the exorbitant spending. It's not necessary. We're probably going to move to a much smaller place. It's been a long, long process. Everybody that's left in here is the best team there is. These kids have gone through hell with me. It's been hard on everybody.
A: What is your reaction to the grand jury subpoena?
J: The Justice Department is looking into the misappropriations of funds. We are a public company and you have to do things right. ... I had to do the right thing. I still run a risk. I was an officer. I signed checks. I was vice chairman of the board. I should've never been on the board. ... I wish we would've stayed small and never gone public. It complicated everything.
... I don't think money is the root of all evil, it's power. People would give millions for one ounce of power. It's really sad. In a way, this is the best thing that ever happened to me in my life. I can really see who my true friends are. Nobody ever wants to see anybody successful and happy. I'd rather just be with my animals. I'm not bitter, it's just people in general make me sick. I'd rather just spend time with my dogs and my horses.
A: What do you know about Bob Friedland?
J: Bob's been missing over two months. We got left with this. ... I thought he was my best friend, that I knew him better than anyone, and then I found out that he didn't even own his house. ... Bob may have made some mistakes but I don't think he's behind all of it. Maybe it's my own denial. I don't think Bob is guilty of everything. I think Bob is left as the one they put all the blame on. ... The rumor is he's in New York with his son. Bob's best friend called me. Who took the dogs? Bob loved his dogs more than anything. No matter what I would've taken care of the dogs. The dogs weren't there. Bob would never, ever leave his dogs to the pound. The rumor is he's in New York with his son. Some people were saying that his son doesn't like him. That's b.s. ... So where is Bob? I don't know. I have no clue. I hope he's OK.
A: What are your plans?
J: At times, I don't know what I want to do. The next 30 to 60 days I'll be deciding if this is for me, saving JKP or moving on and focusing solely on Bad Influence (not Bad Intentions). There's been a lot of hurt and pain going into this company and it's sucking me dry, but it's always entertaining. If we can't save JKP, I don't think I'm going to do anything in the business. Just kidding.
Kelly directed further questions to the website badinfluence.tv.
The Los Angeles Times ran a story about the JKP bankruptcy in its Saturday edition. The story can be read at http://www.latimes.com/news/local/valley/la-fi-porn13aug13,1,6775668.story?coll=la-editions-valley.
