As a part of his protection in opposition to WorldVentures searching for a preliminary injunction in opposition to him, former President Eddie Head filed a declaration on March twenty fourth.
Head is joined by Byron Schrag, Izhak Ben Shabat, Matt Morris and Muzafer Najfi, who every filed separate declarations a day earlier on March twenty fourth.
- Kenneth “Eddie” Head – employed by WorldVentures in 2007, served as Artistic Director, Vice President of Advertising, President of Americas, Co-President and President, resigned in January 2021, now President of Seacret Direct
- Byron Schrag – joined WorldVentures in 2005, Crew Chief and President’s Advisory Council member, nonetheless paying WorldVentures subscription however now a Seacret Crew Chief
- Izhak Ben Shabat – Seacret co-founder and CEO
- Matt Morris – joined WorldVentures in 2007, Crew Chief and President’s Advisory Council member, nonetheless paying WorldVentures subscription however now a Seacret Crew Chief
- Muzafer Najfi – employed as Vice President of Discipline Growth at Seacret in 2015, left that function to change into a Seacret Agent in Jan 2018 (nonetheless seems to be greater than an Agent primarily based on his declaration although)
I felt as co-founder and CEO of Seacret that Izhak Shabat’s declaration deserved its personal write up.
Seeing as there’s appreciable overlap between Shabat’s declaration and the opposite 4, I felt it’d be extra helpful to group principal themes and the related textual content from every declaration.
I’ve headlined these themes under in no explicit order. Collectively they supply inside into WorldVentures collapse and eventual chapter, from 5 distinctly completely different views.
Wayne Nugent could be a management freak
Izhak Shabat: I led the negotiations over the CMA on behalf of Seacret.
I largely interacted with Nugent, who informed me that hemade all the necessary enterprise choices for WV and demanded that his counter-negotiatior be the one that made all the necessary enterprise choices for Seacret.
Muzafer Nafji: Shortly after that first name, I used to be concerned in one other name with Nugent, Head and Ben Shabat.
Nugent informed us what share of possession he has in WorldVentures.
he informed us not less than 20 occasions throughout the name that he makes the choices for WorldVentures.
Nugent informed us he wished to tell us who made the choices, and wished to ensure he was speaking to a choice maker for Seacret.
Nugent informed us we didn’t must contain others since he makes the choices.
WorldVentures approached “Jeunesse and others” previous to Seacret
Eddie Head: WorldVentures started trying to increase capital once more in early 2020 to handle its monetary difficulties.
I turned conscious that WorldVentures started to have discussions with Jeunesse and others and in the end, Seacret.
Izhak Shabat: Within the spring of 2020, I acquired phrase by way of a contact on the beauty-company Jeunesse that WV could be inquisitive about restarting negotiations with Seacret.
WorldVentures’ co-marketing settlement with Seacret “carried out poorly”
Eddie Head: In early October 2020, (Bo) Quick informed me that Ben Shabat thought the Co-Advertising Settlement was performing poorly and that he didn’t need the product expense publicity and due to this fact had determined to terminate the Co-Advertising Settlement.
Shortly thereafter, I acquired a name from Ben Shabat who informed me that Seacret wished to terminate the Co-Advertising Settlement.
Izhak Shabat: A number of months after the CMA was executed however just a few weeks after WV started providing Seacret merchandise to its members, I began listening to rumors that WV’s monetary situation was persevering with to deteroriate.
It was additionally evident from Seacret’s gross sales information that WV’s gross sales representatives weren’t motivated to promote the Seacret merchandise that have been supplied below the CMA.
Wayne Nugent “was livid” when phrase of WorldVentures pending chapter acquired out
Eddie Head: (throughout the co-marketing settlement termination name with Izhak Shabat)
Ben Shabat mentioned he had info that WorldVentures was on the verge of chapter.
This was not as Bo Quick had described their dialog and I requested Ben Shabat to be affected person and let me speak to Nugent.
I informed Ben Shabat I used to be not conscious the chapter declare and wished to confirm the declare. I requested Ben Shabat to provide me 24 hours.
I then known as Nugent to let him know what Ben Shabat had informed me. Nugent was livid.
Nugent had suspected he was being undermined from throughout the govt staff and this seemingly confirmed the suspicion.
Nugent and I known as Ben Shabat to debate this information. Nugent requested Ben Shabat who was the supply of this info.
Ben Shabat declined to offer the supply stating that he had a private dedication to not reveal the supply.
Michael Poates’ and Bo Quick’s tried WorldVentures coup
Eddie Head: Nugent and I known as Poates, WorldVentures’ Chief Working Officer.
Nugent requested Poates to contact Ben Shabat to reassure him, attempt to dissuade him from canceling the settlement and to find out his degree of curiosity in a possible partnership or funding.
Poates known as Nugent and me again the subsequent day and informed us that Ben Shabat doesn’t need his repute in danger, that he has invested over $2 million in stock and is extremely uncovered.
Poates informed Nugent and I that Ben Shabat didn’t need to proceed the Co-Advertising Settlement.
Poates additionally informed Nugent and me that Ben Shabat had no real interest in investing or partnership or dialogue a possible acquisition.
After the decision with Poates, Nugent and I spoke privately the place Nugent shared his doubt within the veracity of Poates’ account of the decision with Ben Shabat.
We determined to name Ben Shabat straight and ask for clarification and thank him for his partnership.
After Nugent shared what Poates had claimed about his name with Ben Shabat, Ben Shabat responded with shock and anger that he could be misrepresented.
He acknowledged that he had “not informed Poates that he was not inquisitive about partnership” and in reality had acknowledged that he “was prepared to assist in any manner that he might.”
Nugent and I brazenly expressed our concern on the inconsistency and requested Ben Shabat to return to Dallas to debate a deeper partnership privately.
As acknowledged, after receiving the October 6, 2020 e-mail from Ben Shabat, Nugent invited Ben Shabat to debate to debate an funding or acquisition.
That night, Ben Shabat requested me if “Wayne is critical concerning the dialogue this time.”
He jogged my memory of the month of negotiations 4 years in the past that resulted in no deal, misplaced time, legal professional’s charges and distraction.
I informed Ben Shabat that I believed Nugent was very critical, we simply wanted to find out the easiest way to accomplice.
The subsequent day, I met with Nugent and Ben Shabat in Frisco on the Marriott Legacy.
We mentioned completely different instructions that Nugent and Ben Shabat might pursue shifting ahead, together with funding, merger or acquisition.
We met once more the next morning at Nugent’s dwelling the place we outlined the deal factors that will in the end type the inspiration for an APA.
With the intention to save WorldVentures’ enterprise from failure and to provide the brokers a chance to earn commissions, Nugent acknowledged both a merger with or sale to Seacret was essentially the most viable possibility.
He brazenly shared his issues that any non-public fairness accomplice might be profitable and that the proposal shared with him most just lately by Poates would lead to lack of his possession and an unknown model, management and administration could be put in place that the sphere wouldn’t observe.
He described the PE possibility as having no likelihood of success.
Izhak Shabat: Najfi knowledgeable me that he had been contacted by WV’s President Bo Quick to rearrange a convention name me with me, Quick, and WV’s COO Michael Poates.
Poates … informed me that he and Quick supposed to sideline Nugent (by threatening a legal referral), hearth Head and most of his gross sales staff, and take management of WV.
Poates then supplied to facilitate the sale of WV to Seacret for $15 million.
In change, Poates and Quick wished me to agree to provide them and different WV executives 49% of the shares of the mixed firm.
I ended the decision by declining their provide and resolved to speak straight with Nugent, because the proprietor and CEO of WV, concerning the points raised by Poates and Quick.
Bo Quick was employed as WV’s President in or round September 2020. He seems to have been fired shortly thereafter.
Izhak Shabat: Nugent fired Quick after receiving my info however stored Poates on the board as a result of Nugent mentioned he felt Poates might be “managed”.
In February 2021 Sharing Providers appointed Quick CEO of Elevacity, which was shortly thereafter renamed to The Blissful Co.
Izhak Shabat: As the 2 sides have been going forwards and backwards making an attempt to finalize the APA, Poates known as me and urged me to contemplate together with Rovia in Seacret’s provide.
Poates additionally represented to me that if Seacret supplied to provide him and a number of other different present WV executives an possession stake in Rovia, he would make it possible for the sale of Rovia could be consummated.
He additionally reiterated his plan to push Nugent out of the corporate.
A number of days afterward December 12, 2020, I known as Poates and recorded the decision.
Poates repeated his proposal, together with volunteering that he had “pre-borrowed” $1 million to put money into the transaction and that Rovia’s “inventory will sky rocket” after closing.
I didn’t comply with Poates’ scheme, and Seacret didn’t embody Rovia in its buy provide at the moment.
Muzafer Nafji: On October 1, 2020, I used to be on a Zoom name with Ben Shabat, Poates and Quick.
Poates primarily spoke on this name.
Poates informed us that his uncle was the founde rof Jack-in-the-Field, that Poates had been a observe star, and that he had been an govt chef in California, and later moved to Chandler, Arizona, the place I dwell.
Poates informed us he had operated a Papa Johns franchise, and he purchased 180 eating places, went to Dairy Queen and put in it or a associated entity into chapter 11. Poates informed us he had consulted for eating places.
Then, Poates went into particulars of WorldVentures.
Poates talked about WorldVentures’ EBITDA and its debt.
EBITDA stands for “Earnings Earlier than Curiosity, Taxes, Depreciation, and Amortization”.
Muzafer Nafji: Poates informed us that WorldVentures’ EBITDA final 12 months was 4.5% and that he had taken the EBITDA to 10%.
Poates informed us that WorldVentures had $118 million in debt, and paid of [sic] $10 million in debt at 30 cents on the greenback.
Poates informed us that he was lowering overhead, and that enterprise was struggling.
Poates defined that WV owed Rovia $4 million in excellent journeys, and WV owed its main gross sales representatives $26 million.
Poates informed us that WorldVentures made $150 million income, 95% from membership and 5% from journey.
The Senior chief, Tom Montgomery, was owed about $5 million which was due November 1, 2020.
Poates informed us that when WV did not make its fee on November 1, he deliberate to terminate Head and push out Nugent.
Poates mentioned there have been two conditions, both an asset buy or a chapter 11 chapter.
Then, Poates mentioned he would go to the “feds” about Nugent.
Poates mentioned that whoever would do the asset buy with them would get 51% and the opposite 49% would go to WV’s executives, who would provide a small share of possession to different WV staff.
Poates and Quick would negotiate with leaders and allow them to know they’d get 25% down of what was owed, and the remainder paid out in funds if the leaders would signal a two-year settlement that they’d not depart for an additional firm.
Poates mentioned Head could be pushed out of the corporate and Nugent couldn’t be a part of the asset buy as a result of it could be unlawful.
Poates mentioned that if Nugent went alongside, Nugent could be introduced in afterward as a founder, however that he wouldn’t have any possession curiosity.
Poates mentioned they’d pay Nugent $1-2 million to be the face of the corporate.
We requested how Nugent felt about this plan.
Poates mentioned that they’d Montgomery, the senior debt holder, on board, and that Nugent has no manner of paying the senior debt.
Poates mentioned Nugent had personally assured the load on the senior debt holder.
Poates mentioned that Nugent would don’t have any alternative however to comply with this plan as a result of WV had info that might put Nugent in “jail”.
On this Zoom name, Poates and Quick requested for $15 million from Seacret and that that quantity would repay senior debt, and pay different debt at 66 cents on the greenback.
I requested Poates why he was proposing 51% and requested the place the opposite 49% would go.
Poates mentioned the 49% will go to the executives, that they’d provide some staff a share for possession, and save a share for the long run.
Poates informed us that he has different individuals prepared, three or 4, to do the asset buy.
Poates mentioned they may not pay the lease and he was negotiating the lease, which was one other $30 million in debt including to a complete of about $143 million in debt.
Poates mentioned $15 million would do it, and Poates would keep on in the event that they wished, and assist run the corporate.
Poates mentioned Quick would run the sphere, Poates would run the corporate, and Nugent would simply be the founder.
Poates mentioned they’d lose some enterprise with this however they have been OK with that.
Poates defined that he believed Seacret could be the most effective accomplice to buy WV’s belongings, and Seacret could be in the most effective place to rent WV’s gross sales representatives and save WV’s enterprise mannequin.
My impression was that this was Poates’ plan, not a proposal. He appeared to have all of it found out.
Poates mentioned they thought Seacret was the most effective one if they arrive in at $15 million.
Poates indicated that he would be certain the deal occurs if Seacret agreed to those deal phrases.
He additionally requested us to maintain this dialog non-public.
Whereas on the Zoom name with Poates, Quick and Ben Shabat, Quick texted me saying that Poates was being cautious to not trash Nugent and Head out of respect of workplaces.
Quick acknowledged Poates is aware of Nugent and Head are the issue.
After this name, Poates and Quick knowledgeable us that each one future communications could be with them and never with Nugent or Head.
Poates led us to consider that WV was terminating Head and that Nugent was being pushed out and would not have decision-making authority.
After the Zoom name, I informed Quick that Seacret is not going to do $15 million. Quick informed me he wouldn’t both.
I informed Quick that Seacret doesn’t need the Co-Advertising Settlement if WorldVentures is submitting for chapter.
I defined that Seacret had issues that WV’s impending chapter might hurt Seacret’s model, and Seacret had concenrs about WV’s plan to do away with Nugent and Head.
I informed Quick that Ben Shabat drafted a doc to terminate the settlement due to the potential chapter submitting.
Quick informed me from that time that each one communications must be executed by way of Quick and Poates.
Quick requested that Ben Shabar ship the settlement on to Poates.
Quick requested if Ben Shabat would say that lack of gross sales was the explanation for terminating the settlement, in any other case Nugent and Head would really feel no responsibilitiy.
Quick informed me he would speak to Poates.
Quick informed me that he and Poates wished Seacret to say it was sad with the settlement due to the shortage of gross sales.
The reality is that Seacret wished to terminate the Co-Advertising Settlement due to Poates’ assertion concerning the potential of chapter, and due to Poates’ plan he described on our October 1 name.
Later, Quick despatched me a press launch to ship to Ben Shabat.
Quick informed me that he and Poates had deliberate out what would occur after Seacret was out of the Co-Advertising Settlement.
Quick informed me that Head or Nugent must signal the termination settlement as a result of they signed the unique settlement, and it’s higher that they signal the termination settlement to take accountability for the deal not working slightly than Poates.
I subsequently went to Dallas, Nugent invited me and Ben Shabat to satisfy with leaders on the Renaissance Resort.
Nugent invited us to dinner after that assembly.
At dinner, Ben Shabat informed Nugent that he had a conspiracy occurring at his firm and that senior executives are planning to take over.
Nugent requested if it have been Poates and Quick.
Ben Shabat mentioned sure.
Nugent requested how he knew. Ben Shabat mentioned he couldn’t go into particulars, however he was giving Nugent a heads up as a result of it was his firm.
Nugent mentioned he’ll deal with it.
WorldVentures served Seacret Direct a stop and desist
I consider the timeline for that is October 2020.
Muzafer Nafji: The Following week, Ben Shabat and I have been planning to return to Dallas for a metting with Nugent, Head, Name and the leaders.
I flew to Dallas and Ben Shabat joined the assembly by Zoom.
Nugent was attending the assembly by Zoom as he was apparently driving to the assembly.
Throughout that assembly, Seacret was served with a stop and desist letter. I left the assembly.
I went again to the assembly and informed the leaders I couldn’t be there as a result of Seacret had been served a stop and desist.
Then, I went and met with Nugent in his automotive on the lodge for forty-five minutes.
Nugent informed me the stop and desist was not from him. I requested who it was from, and mentioned it is unnecessary because you invited us right here.
Wayne informed me he knowns the leaders haven’t been paid and mentioned “you don’t know what I’ve gone by way of.”
I requested how you possibly can invite us right here after which serve a stop and desist.
Nugent mentioned I didn’t do it, there are different attorneys concerned. Nugent mentioned all the pieces will probably be OK, that he simply wanted to cope with this proper now.
I then left the lodge.
That night, Nugent invited me to dinner with him and the leaders.
I mentioned I believed you had a stop and desist. Nugent mentioned I’m inviting you.
At dinner, we mentioned what occurred and potential answer.s
Nugent tried to reassure everybody at dinner that all the pieces would work out.
Nafji doesn’t elaborate any additional on the served stop and desist.
WorldVentures’ non-payment of commissions
Matt Morris: In 2020, after COVID-19 (hit), WorldVentures was having monetary points. Representatives have been starting to go away WorldVentures and the leaders have been changing into involved.
By the autumn of 2020, most of the sale representatives weren’t being paid.
I used to be receiving a each day barrage of calls from representatives with monetary points asking about fee of commissions.
Gross sales representatives have been leaving and many of the staff leaders have been prepared to go away.
Issues continued to worsen and worse.
As brokers weren’t being paid, representatives stopped working which made the monetary scenario even worse.
WorldVentures was unraveling. I believed WorldVentures was going to die a sluggish dying.
Byron Schrag: WorldVentures started having monetary issues in 2016 and 2017 and had skilled difficultly paying the staff leaders over the previous few years.
Previously, we have been in a position to work collectively to create methods to cope with the WorldVentures’s monetary points and get previous them.
Nevertheless, in 2020, the monetary issues after COVID-19 turned a lot worse all through the summer season of 2020 because the slowdown with journey impacted gross sales on the firm.
Representatives have been starting to go away WorldVentures and the leaders have been changing into involved.
By the autumn of 2020, the corporate stopped paying commissions to all the sale representatives—not simply the management.
Because of the non-payment of commissions, gross sales representatives continued to go away WorldVentures for different alternatives.
Lots of the staff leaders together with myself have been taking calls from representatives who had no cash for his or her mortgages and care funds [sic].
With the intention to attempt to retain our downline, most of the staff leaders, together with myself, started to ship cash to our staff members to assist with private bills comparable to mortgages and automotive funds.
All through the summer season and fall of 2020, the staff leaders have been watching an erosion of the sphere as representatives left for different jobs comparable to different community advertising and marketing corporations and promoting actual property.
This erosion of the info base and the persevering with worsening of the funds of WorldVentures induced me and the opposite staff leaders to have nice concern about the way forward for WorldVentures.
Eddie Head: Over the previous few years, I’ve loaned tons of of hundreds of {dollars} out of my very own pocket to the corporate to pay commissions, contractors and to maintain the lights on.
I’ve paid mild payments, lease and mortgages for representatives who couldn’t due to our delays, and foregone compensation of my very own bills for greater than a 12 months and a half to avoid wasting the corporate cashflow when it was most wanted.
Finally, I used to be not repaid all of my bills and easily trusted my contributions and intentions could be reciprocated.
Izhak Shabat: Nugent was strongly pushing for an settlement as quickly as attainable as a result of WV’s gross sales representatives had not been paid the commissions they’d earned for months and have been voicing their intent to go away the corporate.
As I found later, WV’s failure to pay its gross sales representatives was an issue of its personal making.
Poates informed me that WV had funds to pay sales-representative commissions, however selected to pay different collectors as an alternative due to issues over an involuntary chapter submitting.
Muzafer Nafji: I subsequently went to Dallas, Nugent invted me and Ben Shabat to satisfy with leaders on the Renaissance Resort.
Through the assembly, WV’s gross sales consultant leaders have been pressuring the WV executives to work out their variations and make a cope with Seacret.
The gross sales representatives have been owed some huge cash, and it was getting worse each month.
The leaders wished their downline representatives to have the ability to make commissions, particularly with the vacations developing.
The leaders informed Nugent that WV must get a deal executed, and Nugent reassured them that it’s going to occur.
Seacret a savior for WorldVentures distributors not getting paid
Matt Morris: I used to be very enthusiastic about this chance to work with Seacret as a result of there was hope that we might hold the staff and database intact and proceed working collectively.
I considered the potential of working with Seacret very positively as a result of, in any other case, WorldVentures was going to easily die out.
On the mid-October assembly held on the Renaissance Marriot, the staff leaders mainly informed Nugent {that a} determination needed to be made that day about whether or not the Seacret transaction would go ahead or not.
The staff leaders indicated to Nugent they have been prepared to go away if a deal was not executed.
Nugent didn’t announce a choice on the assembly.
That night time, I attended a dinner with different staff leaders.
At that dinner, we mainly mentioned goodbye to one another and informed one another that “we had run”.
I believed it was the top of WorldVentures as a result of at dinner that night time, all the staff leaders indicated they have been planning to go away.
Shortly thereafter, I realized that the Seacret Direct transaction was going to ahead.
The subsequent weekend, WorldVentures held an in-person occasion in Dallas and formally introduced the transfer to Seacret.
Roughly 300 individuals attended the occasion and we went over the plan for shifting to Seacret.
Nugent introduced his imaginative and prescient for the union and promised everybody that we might have journey by way of Seacret, we might have occasions as we had and that all the leaders have been on this collectively together with himself, Head and Marc Accetta.
I mid November, I had a dialog with (Michael) Poates.
I contacted Poates to get some solutions on the chapter course of and the way it was going to work.
Throughout that dialog, Poates indicated that the cope with Seacret was the best choice.
He indicated he would have beloved to proceed to run the corporate however that the Seacret deal was the best way to go.
I consider that WorldVentures would have died as an organization if the representatives and staff leaders had not been in a position to transfer over to and work with Seacret.
As well as, I and different staff leaders inspired the representatives to proceed to pay their membership in WorldVentures even after becoming a member of Seacret.
Byron Schrag: Through the fall as circumstances deteriorated, all the staff leaders have been searching for choices comparable to a transfer to different community advertising and marketing corporations however they didn’t need to depart WorldVentures.
Many had been at WorldVentures for a very long time and the leaders appreciated the corporate and tradition.
Sooner or later and as an interim answer to the issues, Wayne Nugent and Kenneth “Eddie” Head put collectively a deal in order that the representatives might begin promoting merchandise of Seacret Direct, LLC in order that the representatives might begin incomes fee.
As issues turned worse, I realized that WorldVentures was exploring a deeper relationship with Seacret, which made sense as a result of the representatives have been already promoting its merchandise.
Nugent and Head began speaking to the staff leaders a couple of risk of working at Seacret.
In October and November of 2020, WorldVentures held a number of in individual conferences with its personal management in Dallas at completely different accommodations to debate how you can put a deal along with Seacret.
Usually, these conferences have been attended by six to 10 of the staff leaders, who have been essentially the most trusted, strongest management of WorldVentures with Nugent and Head and different worldwide staff leaders attending by cellphone.
By late October, the staff leaders have been at a breaking level.
By this time, the staff leaders had flown to Dallas six or seven occasions from everywhere in the nation to attend in individual conferences and there was nonetheless no closing determination on a proposed transaction with Seacret.
The database continued to deteriorate as representatives stored leaving WorldVentures.
Crew leaders have been receiving determined calls from representatives who had not been paid in months.
At a mid to late October assembly held on the Renaissance lodge in Frisco, Texas, the staff leaders gave Nugent an ultimatum and mainly informed him {that a} determination needed to be made that day about whether or not the Seacret transaction would go ahead or not.
The staff leaders informed Nugent that they may not wait any longer for a choice and that if WorldVentures was not going to do a transaction with Seacret, then the staff leaders have been ready to go away WorldVentures.
At that time, Nugent threw a chair on the wall.
Head was additionally at this assembly, however his actions didn’t result in Nugent throwing the chair and leaving the room.
I consider Nugent threw the chair as a result of he was pissed off on the staff leaders who have been pushing for a choice as a result of it occurred following statements from the staff leaders.
The leaders continued to ask for each day updates from Wayne and the executives and shortly thereafter, the staff leaders have been informed that the Seacret transaction was going to go ahead.
I had heard that the executives within the company workplace have been against the transaction however ended up altering their minds, which made it attainable to do the transaction.
The subsequent weekend, WorldVentures held an in-person occasion in Dallas and formally introduced the transfer to Seacret.
Roughly 300 individuals attended the occasion and we went over the plan for shifting to Seacret.
I consider that the Seacret deal was essential to protect the downline of the representatives.
If WorldVentures had not partnered with Seacret, then there could be no firm left as a result of the leaders have been ready to go away WorldVentures.
Eddie Head: That afternoon (October eighth), we held the X Crew emergency assembly on the Renaissance Resort.
At this assembly, Nugent shared his imaginative and prescient of this contemplated settlement with Seacret.
Ben Shabat was already in transit to the airport when Nugent known as him to request that he change his flight and meet the leaders on the Renaissance.
Ben Shabat agreed and got here to the lodge to satisfy the leaders and talk about the proposal brazenly with the group of leaders current.
The leaders have been very enthusiastic and unanimously supported the union noting that there was already familiarity with Seacret to the purchasers and gross sales representatives and that they too noticed distinctive alignment in cultures and importantly, within the compensation construction.
Each corporations shared a binary-hybrid compensation plan making transition simpler to execute and simpler to speak with minimal disruption to representatives’ companies.
The discussions about an funding or acquisition progressed in October 2020.
Since WorldVentures’ enterprise was struggling to outlive and brokers have been leaving or threatening to go away, WorldVentures wanted rapid help and Nugent, Ben Shabat and I labored with urgency to stipulate a deal.
The leaders have been rising very anxious and fearful that they have been out of time as very particular rumors with actual information of the state of the corporate have been now being shared within the business and plenty of of them had acquired calls from different corporations soliciting them to go away WorldVentures and take their groups to the competitor’s firm.
Nugent once more expressed his issues that there was leak internally and actively undermining of the enterprise and himself on the supply of those rumors.
Muzafer Nafji: Earlier than WV and Seacret even finalized any settlement, Nugent started sharing Seacret’s story with WV’s leaders and saying that WV was going to be advertising and marketing Seacret merchandise.
WorldVentures’ non-payment to executives
Eddie Head: On the time that I signed the Employment Settlement, I additionally signed a Earnings Participation Models Settlement and a Liquidity Models Settlement.
So far, I’ve not acquired any remuneration below both of these agreements.
Moreover, as part of my employment Settlement, I had rights to obtain the Govt Bonus Program that was to have been outlined inside 60 days of the efficient date of the settlement.
This was by no means outlined nor carried out, and I acquired no description of a plan in 2019 nor in 2020, nor did I obtain a bonus of any type for 2020 regardless of requesting a plan be outlined repeatedly.
WorldVentures’ Seacret royalties deal is value $12 million
Eddie Head: Beneath the phrases of the LSA, Seacret has already paid roughly $700,000 to WorldVentures as of the February twenty second interval.
This was for about 10 weeks of earnings given the mid December launch to their world viewers.
As soon as accomplished, the Royalty funds will equal $12,000,000.00 merely for entry to the database however no possession in any asset of the Debtor.
WorldVentures used Seacret to do away with “expendable” staff and keep away from severance payouts
Eddie Head: In furtherance of the proposed merger with or sale to Seacret, on November 10, 2020, Nugent, on behalf of WorldVentures, despatched a Letter of Intent to Izhak Benshabat, Chief Govt Officer of Seacret.
To that finish, Debtors contemplated that sure of Debtors’ executives could be employed by Seacret.
An inventory of staff essential to help the sleek transition between the businesses and ongoing discipline consultant/agent and gross sales help was recognized by Nugent and me after a request from Poates.
These staff and contractors have been requested to forgo their severance as all have been recognized as expendable within the Debtors’ workforce discount efforts.
Poates personally added my title and Justin Name to this checklist of staff for whom Seacret could be allowed to rent.
I mentioned this checklist with Nugent who authorized the checklist.
Through the time that Seacret was negotiating with WorldVentures on the asset buy settlement, I continued to have discussions with Poates on the most effective time for me and Justin Name to maneuver over to Seacret.
Poates requested that Name and I keep on till the chapter was filed to assist maintain the sphere and preserve their memberships with the Debtor in addition to assist to finish the negotiation of the APA.
We brazenly mentioned my six-month severance package deal, which I used to be entitled to obtain however agreed to not take as a way to profit the property.
We agreed that I would supply two weeks’ discover and that I might not go to another firm apart from Seacret.
We additionally mentioned brazenly that I might not work for another competitor and in reality, I declined the solicitations of others as agreed.
Poates dedicated to me that he would give me the alert when WorldVentures supposed to do one other workforce discount, and that he would lay off me and Name to avoid wasting WorldVentures the expense of my 6-month severance.
On December 29, 2020, Poates known as me to inform me that the time had come for me to maneuver over to Seacret.
I requested Poates how he wish to deal with this. Poates instructed that my resignation would supply the most effective profit to the property.
I dedicated that I used to be solely going to Seacret and I informed Poates I might assist in any manner that I might with the transition.
On December 31, 2020, I submitted my resignation.
In reliance on the representations made to me, I resigned to go to work for Seacret slightly than obtain my six-month severance.
Izhak Shabat: I turned conscious that WV was executing a workforce discount that included a number of high-level staff.
As a part of this course of, Nugent contacted me and requested me to contemplate hiring a few of WV’s staff to help within the transition to Seacret and in order that they might be faraway from WV’s struggling payroll.
Poates additionally made the identical request.
For instance, on a name with me on November 17, 2020, Poates repeatedly requested that Seacret rent a number of WV staff as a way to assist keep away from pricey severance funds and WARN Act points.
WorldVentures executives paid themselves “six determine bonuses” main as much as chapter
Keep in mind these bonuses have been additionally paid whereas distributors had gone unpaid for months.
Eddie Head: In distinction (to me not receiving any bonuses), the opposite executives acquired 6 determine bonuses, the best ever paid to staff in 15 years, that began in mid 2020 and accomplished in November 2020, simply weeks earlier than the submitting for chapter whereas no residual commissions have been being paid to the gross sales representatives.
I realized by way of depositions that Poates, Haynes and probably different executives paid themselves six-figure bonuses within the time main as much as the chapter submitting.
In complete, greater than $750,000.
I didn’t obtain any such bonuses though the Employment Settlement supplied that I might be paid a bonus.
Izhak Shabat: Shockingly, I later realized that WV apparently did have the funds to pay Poates, Paul Jenkins (WV’s Chief Know-how Officer), and Eric Haynes (WV’s Chief Authorized Officer) bonuses totaling $750,000 in August and November of 2020.
Eddie Head claims WorldVentures’ legal conduct in Taiwan predated his appointment
Eddie Head: I perceive that I’m additionally topic to prosecution in Taiwan for actions that predated my appointment to the Directorship of that entity.
There have been no different executives that will comply with act as a director in Taiwan together with Nugent and Dan Stammen.
I’ve requested updates from WorldVentures on the standing of that matter.
Even supposing WorldVentures agreed to indemnify me, I’ve not acquired any updates from WorldVentures although I perceive WorldVentures has acquired updates type the legal professional in Taiwan dealing with the matter.
Dan Stammen linked to WorldVentures “stalking horse” chapter bidder?
Izhak Shabat: On or about February 26, 2021, Dan Stammen, a former President of WV, hosted a Zoom name with varied Seacret and WV gross sales representatives.
On this name, a recording of which I’ve considered, Stammen made quite a few disparaging feedback about Seacret and presaged the precise litigation that WV filed in opposition to Seacret every week later.
Stammen additionally informed the attendees that he was coming again to WV as CEO and that he had a deal to take the corporate out of chapter.
When requested who could be staying at WV in connection along with his deal, Stammen replied that Michael Poates, Eric Haynes and Paul Jenkins would run the enterprise.
WorldVentures’ response
On March twenty fifth, the day after Eddie Head filed his declaration, WorldVentures moved to strike all 5 declarations.
WorldVentures argues the declarations must be stricken as a result of they
comprise testimony: (1) irrelevant to WorldVentures’ request for a preliminary injunction; (2) comprising conclusory testimony on each truth and regulation and narrative testimony; (3) primarily based on rumour or rumour inside rumour; and (4) violating the “Finest Proof Rule”.
WorldVentures claims the filed declarations are
not solely supposed to distract the Courtroom from the actual points that stay, however to aim to impugn the character of sure WorldVentures representatives and function a Seacret PR stunt, presumably to make use of to advertise its new journey enterprise.
WorldVentures haven’t disputed any of the claims made within the declarations.
The one which strikes me as essentially the most pertinent is the alleged unlawful conduct of Wayne Nugent.
If WorldVentures company, Michael Poates and/or Bo Quick are conscious of legal conduct, this must be reported to “the feds”.
For the report BehindMLM hasn’t seen something past what’s claimed within the declarations.
Wanting ahead the courtroom will rule on WorldVenture’s movement to strike. Following {that a} determination on the preliminary injunction in opposition to Eddie Head will probably be made.
There isn’t any timeline for these rulings however I’ll proceed to observe the case docket for updates.
Replace 14th April 2021 – WorldVentures has secured a preliminary injunction in opposition to Eddie Head.