TEEN Mom 2 star Chelsea Houska’s former business partner fears the star will “steal business” if she hands over financial records in their $3 million court battle.
Chelsea, 30, and her husband Cole, 32, were sued by consulting company Envy for $3million for allegedly withholding money made from social media promotions.
Chelsea, Cole and the other defendants responded to the lawsuit by filing a counterclaim in May 2020, alleging Envy actually withheld over $150,000 from them.
In court papers obtained by The Sun, Chelsea and Cole’s legal team emailed the judge to get permission to file a motion for the ex-business partner to produce additional documents and for a hearing to “address the issues.”
The Sun can exclusively reveal Envy is fighting back against Chelsea and Cole’s request by admitting the company fears they may steal business.
In court papers obtained by The Sun, Envy claimed Chelsea and Cole are requesting “sensitive financial documents concerning Envy’s overall finances.”
The court papers read: “These documents are wholly irrelevant. Simply put, Defendants cannot extrapolate the amounts they purport to be owed, a portion of only certain revenue received by Envy, or any other relevant fact, from Envy’s overall revenue and expenses.”
Envy said they have provided the defendants “extensive bank statements.”
The company claimed Chelsea and Cole “already possess the information necessary to calculate the amounts relevant to their counterclaims and Plaintiff’s claims.”
Envy believes that handing over unredacted bank statements and complete financial records will give Chelsea and Cole a “complete list of the Brands with which Envy works and the amounts each spend on marketing.”
They fear this will “provide a veritable roadmap to stealing business from Envy.”
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The business also claims Chelsea and Cole have refused to hand over the “very same documents” Envy asked for.
Envy is asking the court to deny Chelsea and Cole’s request for the records, and is requesting they produce all financial records in their possession.
A conference to discuss the matter has been scheduled for September 20.
CHELSEA’S DEMAND FOR RECORDS
As The Sun previously reported, in Chelsea and Cole’s email to the judge, the parties attempted to “resolve” the legal war, but they were “unsuccessful.”
In August 2020, Chelsea and Cole, the Defendants, requested accounting statements, banking statements and financial records.
The email claimed Envy “has failed to produce accounting documents for the entire relevant period and has only provided financial and banking statements for approximately seven companies out of approximately 68.”
Chelsea and Cole claimed the financial documents will give an “accurate picture of exactly how much money Envy received on behalf of Defendants from business generated” and how much they “failed to pay to Defendants.”
According to the email to the judge, they believe Envy owes them more than the $154,074.62 stated in their counterclaim.
As The Sun reported, Envy claimed in the lawsuit that the company entered into a contract with The William Gerard Group in 2015 to provide consulting services to Chelsea and Cole, who entered a contract in 2016, in exchange for a portion of revenue made from deals.
Envy worked as a “consultant to negotiate appearance, endorsement, licensing, royalty and television agreements and related contracts” from 2015 through 2019.
The court papers claim Chelsea and Cole “failed to pay any of the contractually required fees.”
Chelsea and Cole were required to pay Envy 35 percent of all fees or royalties for domestic deals and 40 percent for foreign deals.
The court papers claimed Chelsea and Cole “breached their contracts by directing certain Brands to directly pay Houska, DeBoer, one of the other Shared Clients, and/or other persons or entities to avoid paying Envy Licensing Fees.”
The MTV stars also “both failed to perform, without any cause or reason, many of their responsibilities to the Brands,” according to the court papers, including Profile Sanford, Diff, Fab Fit Fun, Bombay Hair Wand and many more.
Allegedly failing to meet the contractual obligations caused them to “forfeit certain fees upon which Envy was entitled to receive.”
The court papers continued to claim Chelsea and Cole made “millions of dollars” due to Envy’s efforts.
The company is suing for $3million.
Chelsea and Cole filed the counterclaim back in May 2020, alleging Envy actually withheld $154,074.62 from them.
Chelsea and Cole denied the allegations and claimed they “do not owe any payments to Envy” and that the company “wrongfully withheld payments due to Chelsea.”
The reality stars claimed Envy has “actually harmed the professional careers of Defendants Chelsea and Cole by withholding considerable payments from them and acting in an unprofessional manner, including but not limited to, arguing with and acting disrespectfully toward Chelsea and Cole, potential and then-existing licensing contacts, and other professional contacts of Chelsea and Cole.”
The Defendants also claimed Envy “intentionally omitted numerous deals and/or revenues from the Account Statements for the sole purpose of depriving Chelsea, Cole, and TWGG from receiving funds rightfully due and owing to them.”
They are asking for the lawsuit to be dismissed and to receive “monetary damages on their Counterclaim.”
Envy denied the claims against them in their response.
LEAVING TEEN MOM
Chelsea left Teen Mom 2 in 2020 to “focus on the next chapter in life that will focus on developing our brand and taking things to the next level with new endeavors and expanding family businesses.”
She launched home decor company Aubree Says shortly after.
She and Cole are parents to Aubree, 11, Watson, four, Layne, three, and Walker, seven months.