News Column

Bankruptcy Clouds 'Girls Gone Wild' Collection Path

April 11, 2013

Two "Girls Gone Wild" entities on the hook for a $5.8 million judgment here have filed for bankruptcy, as the legal thicket surrounding franchise founder Joe Francis grows denser.

An attorney for Tamara Favazza, who won the money on a claim the adult video franchise showed her bare chest without permission, said Wednesday the filings by Mantra Films and MRA Holdings will halt debtor's exam proceedings in St. Louis Circuit Court. That process has been trying to learn what happened to millions once held by the companies.

The attorney, John Medler, said the Chapter 7 bankruptcy filings should not hamper the overall effort to collect, because of a federal suit that names Francis personally, along with a number of Girls Gone Wild entities that have not yet filed for bankruptcy. In that suit, Medler is trying to show that the companies are equally responsible for the judgment.

A lawyer representing Mantra Films and MRA Holdings did not respond to a request for comment.

Trying to chase down Girls Gone Wild money has proved difficult, as evidenced by an array of lawsuits across the country. And that's where Francis has demonstrated his own wild approach to his various holdings.

In a 9th U.S. Circuit Court of Appeals case, involving the government's seizure of $21 million for back taxes owed by Francis, emails have been produced that show him threatening a longtime family friend and attorney who helped him set up Mantra Films.

The seized money traces back to a company established in the Turks and Caicos Islands and owned by a Francis family trust, Rothwell Ltd. The Internal Revenue Service claimed Francis exercised control over the account; Francis is disputing that. In trying to prove its case, the IRS produced voluminous emails in which Francis accuses his father and the lawyer of trying to steal money.

The emails from Francis, laden with exclamation points and capital letters, grow increasingly animated between February and April 2011. Francis threatens to reveal something criminal about the lawyer to his family, then reaches out to those family members and repeats his threat.

"I don't think you realize how (expletive) serious this is!!!!!!" one reads. "Your family WILL pay for your actions!!!!! I PROMISE!!! YOU (expletive) CROOK!!!"

In another: "Did your daughter get beaten and raped yet? That's the word."

And in a text: "I don't think you get it. This is not litigation to me, this is personal. I want your head on a stick. I'm comming!"

The court filing also includes a draft copy of a lawsuit Francis filed against that same lawyer in one of California's state courts in March 2011, in which he acknowledges being the principal shareholder of Mantra Films. Medler said that contradicted Francis' statements in the St. Louis debtor's exam, in which he claimed he ended all involvement with Mantra about 2009.

"When we examined him, he had stock in a $10 million company that went poop and he denies knowing where it went, and suddenly here he's found his stock!" Medler exclaimed, reacting to the court filing.

Repeatedly during the November 2012 debtor's exam, Circuit Court Judge John Garvey had to warn Francis that he was close to being arrested for contempt of court for dodging questions and failing to produce financial records. The judge most recently issued an order demanding that Francis appear in court with company representatives Thursday; that will now be moot because of the bankruptcy filings.

An apparently related company, GGW Brands LLC, and several subsidiaries filed a Chapter 11 bankruptcy petition earlier in Los Angeles, listing more than $16 million in disputed claims. The largest was won by Wynn Resorts Limited over a gambling debt and statements Francis made about a casino in Las Vegas and its founder, Steve Wynn. Favazza had the second-largest of those claims.

Favazza sued in 2008, claiming an independent contractor for the video company lifted her tank top in front of a camera at Rum Jungle, on Laclede's Landing, in 2004. A jury ruled against her, but a judge granted a new trial and she won a default judgment when nobody showed up for the defense.

Source: (c)2013 the St. Louis Post-Dispatch. Distributed by MCT Information Services.

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