'Girls Gone Wild' Gone Bankrupt: Lawsuits Lead to Chapter 11 - Celebrity Justice
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'Girls Gone Wild' Gone Bankrupt: Lawsuits Lead to Chapter 11

The company that creates the "Girls Gone Wild" videos has filed for Chapter 11 bankruptcy.

The move was apparently taken to shield the company, GGW Brands, from claims against the company including casino debts and multimillion-dollar jury awards, reports USA Today.

A spokesperson at the company said the bankruptcy filing will not affect the company's normal operations. So fans of the "Girls Gone Wild" videos and magazines won't have to worry about missing out on what drunken college women are doing on spring break, at clubs, and in hotel rooms.

The beginning of the path towards bankruptcy may have started when GGW Brands' founder, Joe Francis, got into a high-profile legal fight with Las Vegas casino mogul Steve Wynn.

In short, Wynn had claimed that Francis owed him $2 million in gambling debts. In response, Francis said that Wynn deceived him into gambling after he had already accumulated significant losses. Wynn responded by suing Francis for defamation.

Francis then went on to make some more statements against Wynn, and in turn, Wynn sued Francis for defamation again. After a jury trial, Francis found himself owing Wynn about $10 million for both the defamation and the gambling debt.

Aside from Wynn, Francis also lost a lawsuit brought by a woman who appeared in one of his videos; she claimed that someone involuntary exposed her breasts on tape, reports USA Today. She was awarded $5.8 million.

By filing for Chapter 11 bankruptcy, Francis may be able to have some of his debts decreased or discharged. Generally, Chapter 11 bankruptcy allows a business to reorganize and propose a plan for profitability post-bankruptcy. The debtor may have the opportunity to renegotiate the debts owed and reach a compromise with his creditors. A Creditor may have an incentive to accept the deal because the alternative would be a fire sale under Chapter 7 in which the creditor could receive nothing.

As Francis listed GGW Brands' assets at less than $50,000, Wynn and GGW's other creditors may have strong incentive to take whatever they can get.

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