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TheStreet Open House

'Girls Gone Wild' Founder Ordered to Stay Away

Neilson also noted GGW has no employees of its own and leases employees from Perfect Science.

Argyle also leases employees from Perfect Science, and it is sometimes unclear whether employees are leased to GGW or Argyle.

Neilson said the exact relationship between the three entities is unknown, but Francis has control over all three companies. Since his appointment, Nielson has instructed employees to only take direction from him and not Francis.

Francis, however, has not taken a step back and on April 21 allegedly made "violent threats" to employees and attempted to fire them because they were not obeying him. Francis also allegedly has been "verbally abusive," and many employees are afraid of him, Nielson said.

GGW distributes adult entertainment content through various pay-per-view outlets and DVDs. The company has continued its distribution since filing for bankruptcy on Feb. 27 and intends to continue so long as it is profitable. Nielson was appointed on April 11 at the request of casino operator Wynn Las Vegas LLC and the U.S. trustee.

Wynn on March 21 requested a trustee, asserting GGW had paid substantial funds to Francis over the past year. Francis doesn't receive a salary or a consulting fee. Instead, he uses corporate assets to pay all or substantially all of his personal expenses, including his mortgage, credit card bills and legal fees for matters not involving GGW, Wynn alleged.

U.S. Trustee Peter C. Anderson on April 9 added his voice to the chorus, filing a motion seeking the appointment of a trustee, or in the alternative, the appointment of an examiner.

Anderson in the motion questioned why Francis had a company credit card and also questioned $356,000 paid to Blue Horse, a "Francis entity" that apparently owns a property in Bel Air, an upscale section of Los Angeles, used by Francis. GGW had opposed the appointment of a trustee, asserting that Francis' expenses helped sell the product.

"Francis' 'bad boy' lifestyle and image are inextricably identified with the Girls Gone Wild brand just as Hugh Hefner is identified with Playboy magazine. ... Since there are many free sources of adult entertainment available to consumers on the Internet, the principal thing that causes consumers to pay for the same adult entertainment services offered by the GGW entities is the desire by the consumer to identify with Francis and his lifestyle by being a paid subscription member of the brand he is responsible for starting," the debtor said in court papers.

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