'Teen Mom' star Chelsea Houska hit with $3 MILLION lawsuit by ex-biz partner over hidden assets in secret firms
VERMILLION, SOUTH DAKOTA: Chelsea Houska, star of 'Teen Mom 2', and her husband Cole, 33, have been sued for $3 million by her ex-business partner for "hiding" assets from social media promotions in covert entities.
In May 2020, Chelsea and Cole filed a counterclaim in response to the lawsuit by consulting firm Envy, claiming the company had actually withheld more than $150,000 from them. The former 'Teen Mom 2' stars have allegedly been accused of hiding money in a number of covert LLCs, reported by The US Sun.
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Plaintiff Envy asked the judge in a letter to extend the due date for submitting documents and financial statements as part of the discovery process from October 30, 2022, to November 30, 2022. The LLCs Dakota Ln, Down Home DeBoers, DeBoer Holding Company, and Aubree Says, according to Envy, were "failed to disclose the existence" of Chelsea and Cole. The letter went on to say that Chelsea and Cole's manager, William Dzombak, was fired on August 18, 2022. They discovered from the deposition that Chelsea and Cole "failed to produce critical documents related to the concealed entities, including a number of licensing agreements and the resulting revenue."
Envy claims in its letter that the manager testified at the deposition that Dakota Ln LLC was established after Envy threatened legal action. According to the letter, the manager claimed in his deposition that C&A LLC, the company Chelsea used while she was employed by Envy, had been "shut down and stripped of all assets." The letter continued to state, "Defendants knowingly failed to fulfill their discovery obligations and actively sought to conceal relevant entities, documents, and revenue from Plaintiff and, ultimately, from this court. Defendants have not produced any licensing agreements entered into, revenue received by, nor correspondence from, the Concealed Entities."
Envy asked to add the claims against the four secret companies in a new complaint. Due to their alleged "malfeasance," Envy is also requesting compensation for their "fees and expenses" of filing the new complaint. Chelsea and Cole are also being "sanctioned," according to the plaintiff, for willfully, intentionally, and repeatedly failing to fulfill their discovery obligations.
"Defendants represented they complied with the order, but failed to produce any licensing agreements and related revenue records for Dakota Ln LLC—a failure that Dzombak's testimony makes clear was knowing and intentional, according to the letter," Simply put, the defendants have the documents they were already required to produce, and they are aware of this. Throughout this litigation, the defendant's actions have unnecessarily and vexatiously increased the plaintiff's fees and costs. The letter has not yet received a response from Chelsea or Cole.
Envy asserted in the lawsuit that it had a contract with The William Gerard Group in 2015 to offer consulting services to Chelsea and Cole, who signed it in 2016, in exchange for a cut of the profits from deals. From 2015 to 2019, Envy served as a "consultant to negotiate appearance, endorsement, licensing, royalty, and television agreements and related contracts." According to court documents, Chelsea and Cole "failed to pay any of the contractually required fees."