Sources say that there's a big deal going down that will create a new adult channel in the near future. Time-Warner is supposed to be involved in this one. The pending Time-Warner deal has nothing to do with additional rumors circulating about the formation of the "Pleasure" softcore channel. The softcore channel is being talked-up as a result of the licensing agreement between Pleasure Productions and New Frontier Media that was announced on Feb. 16. \nKreloff: "I Never Said There Wasn't a Pig Farmer"
Boulder, Colorado - New Frontier Media's CEO Mark Kreloff, responding to a story that appeared on avn.com last week, says he made comments last November that have been taken out of context. In a letter written to AVN dated Nov. 11, 1998, Kreloff writes: "There was and never will be a 'pig farmer' involved in our business in an ownership or management capacity." Kreloff's letter was written at the time that New Frontier Media was under a "hostile takeover" by an agricultural magnate named J.P. Lipson.
Lipson, worth in the neighborhood of $500 million, acquired the nickname "pig farmer" in a series of events that had Lipson allegedly loaning the company $1.2 million plus making other financial commitments totalling $10 million in exchange for 70% outstanding equity of New Frontier Media. New Frontier Media is a publically-held company listed on NASDAQ.
Lipson has since filed suit against New Frontier Media, alleging that the company, not only reneged on the agreement to have him run the operation, but had him physically escorted off the company premises by Boulder police for trespassing, as well. New Frontier Media has filed a number of counter claims against Lipson. Dan Bender, a former business partner of New Frontier Media, has given an affidavit to Lipson's attorneys, testifying that both Kreloff and company vice president Michael Weiner said they had no intentions of honoring the business agreement with Lipson.
However, at the time the Lipson scenario was playing out last October, with Lipson purportedly running New Frontier Media on an alleged three-page agreement signed Oct. 5, 1998, Kreloff, in a phone interview with Gene Ross, made comments different from the content of his letter. The follow-up letter to AVN was written days after the phone interview.
In the phone interview, Kreloff categorically denied that there was either a J.P. Lipson or a pig farmer, and that "all was well" with New Frontier Media. Kreloff also denied in the phone interview with Ross that there had been serious issues with Loral Skynet, a company that provides transponder service to New Frontier Media's TeN Channel. However, several news leaks within the New Frontier Media corporate hierarchy, said the opposite, indicating that the company was in arrears to Loral. According to the news sources, New Frontier Media was threatened with a cutoff of its service, meaning that the TeN Channel would have the plug pulled on it if the transponder bill wasn't paid.
Asked about this, Kreloff told Ross the Loral story was nonsense and that New Frontier Media actually "prepays" its transponder bills. Loral Skynet would not offer comment.
Despite Kreloff's disavowals, Lipson was allegedly recruited by New Frontier Media attorney John Combs as the source of a possible bail out to save the channel. Combs has since been replaced with attorney Frank Visciano when Combs came personally under fire in the New Frontier Media's counter claim to Lipson. In the Lipson counter claim, Combs was accused of allegedly rifling through company files. New Frontier Media has also said that Lipson forced the money on them.
New Frontier Media, in its recent 10 Q statement filed Feb. 16 with the SEC, says that Lipson paid money to a vendor [Loral] "at neither the request or direction" of the company." New Frontier Media, according to Lipson attorney Howard Bittman, has repaid Lipson $690,000 of the $1.2 million and has offered to pay the rest. This, despite comments made by attorney Visciano to the Boulder Daily Camera that New Frontier Media was denying Lipson's claim and that "there's no basis whatsoever for the claim."
Lipson has turned down any offers to settle. Lipson, who claims to have eight attorneys working on the case, says he wants to run the company.
In an issue that might be construed as an argument over semantics, Kreloff now contends that his written comments meant to infer that "while Lipson was a 'lender,' he was not an owner or manager" of New Frontier Media.
Lipson believes otherwise and has filed a petition for expedited discovery in the District Court, County of Boulder, claiming that Kreloff and Weiner are "dangerous to the health of the company." Kreloff and Weiner have until March 8 to give the courts a deposition in response. Lipson says he fully intends to take over the company and move its headquarters to California.
