Teen mom Chelsea Houska demands $240,000 from ex-partner in nasty lawsuit after being sued for $4m
TEEN Mom Chelsea Houska has demanded more than $240,000 from her ex-business partner in their vicious lawsuit after the star was sued for a whopping $4 million.
Chelsea, 31, and her husband Cole, 33, were sued by consulting firm Envy for $3 million in 2020 for allegedly withholding money from social media promotions.
Envy filed an amended complaint in the same lawsuit, as Chelsea and Cole’s original company Down Home DeBoer, decorating firm Aubree Says, Dakota Ln LLC and DeBoer Holding Company were added as defendants in the case.
The company accused the reality TV stars of “hiding assets” in the “secret” businesses.
Envy is now asking for $4 million after initially suing for $3 million.
The US Sun can exclusively reveal that Chelsea and Cole have responded by denying the allegations against them.
Court documents reveal that Chelsea and Cole “deny wrongfully failed to disclose the existence of relevant entities” regarding their “secret” businesses.
They defended that they “did not break any contract”.
Chelsea claimed she had “not received any payment” from several brands, including Jaclyn Cosmetics, Kylie Cosmetics, Tarte Cosmetics, Urban Decay and more.
The court documents alleged: “Plaintiff actually harmed the professional careers of defendants Chelsea and Cole by withholding substantial payments and acting in an unprofessional manner, including, but not limited to, arguing and acting disrespectfully towards Chelsea and Cole, potential then-existing licensing contacts and other Chelsea and Cole business contacts; and not having paid the legal fees incurred by the plaintiff. »
Chelsea and Cole then filed an amended counterclaim against Envy.
The court filing read: “Plaintiff initially fulfilled its obligations by providing account statements and corresponding payments for the first, second and third quarters of 2016.
“Beyond that, the plaintiff’s accounting has become non-existent. Indeed, the plaintiff did not provide any account statement for the year 2017.”
A press release was finally provided in July 2018 after “repeated and numerous requests”.
The court documents claimed: “The July 2018 statement did not indicate the period covered. It did not include a column to reflect the amounts that were due.
“The July 2018 statement contained glaring mathematical errors, which resulted in an underpayment of $2,524.31 to Chelsea. Further, the plaintiff never sent Cole the funds owed and owed to him.
“The plaintiff did not provide any account statements thereafter and withheld funds from the counterclaimants.”
Chelsea, Cole and their management team claim Envy owes them $240,000, including partnerships with Loving Cosmetics, Profile, Diff, FabFitFun and more.
THE LEGAL WAR CONTINUES
The US Sun previously reported on the amended complaint that Chelsea signed Envy in 2015, while Cole signed in 2016.
Based on the alleged contracts, they agreed to “enter into license agreements for the property only through Envy, to allow Envy to exclusively negotiate such agreements, collect all resulting revenues and pay Envy 35% of any fees or royalties collected on the property”. for domestic transactions and 40% of any fees or charges for foreign transactions. »
Chelsea’s daughter Aubree, 13, with her ex-boyfriend Adam Lind, and her two eldest sons Watson, 5, and Layne, 4, with Cole have been involved in social media promotions as ” shared customers,” according to the amended complaint.
The court documents claimed: ‘Chelsea and Cole breached their contracts by ordering certain brands to directly pay Chelsea, Cole, one of the other shared customers and/or other persons or entities to avoid paying the Envy license fee .
“Chelsea and Cole have not disclosed these instructions and payments to Envy and have not paid the Envy license fees due from these sums.”
The couple also allegedly “failed to fulfill” their responsibilities to companies including Bombay Hair Wand, Carseat Canopy, Diff, Fab Fit Fun, Loving Tan, Profile Sanford, Sugar Bear Hair, Timeless Organics and more.
The amended complaint continued to allege that Envy learned that Chelsea and Cole “failed to disclose the existence” of the other companies.
Envy claimed Dakota Ln LLC was “created after plaintiff threatened” legal action.
C&A, which was the Chelsea business that originally dealt with Envy, would have been “closed, stripped of all existing assets and contracts”.
Down Home DeBoer was established in 2020, while Aubree Says and DeBoer Holding Company was established in 2021.
The court papers claimed: ‘Chelsea and Cole are now negotiating their trademark and licensing agreements with the shared customers to be performed and paid for by the hidden entities.
“Chelsea and Cole have received and continue to receive revenue generated by customers shared on the property through the brands’ hidden entities.
“Chelsea and Cole treated the funds of C&A and hidden entities as their own and used the funds for personal gain, including removing all assets from C&A for personal use without providing any compensation to C&A.”
Chelsea, Cole and the “hidden entities” are being sued for breach of contract and unjust enrichment.
C&A and the other companies are being sued for tortious interference with contractual and business relationships, and unjust enrichment.
Envy claims that Chelsea and Cole “have received significant financial benefits from Envy’s services through the revenue they and shared clients have received through Envy’s services” and “have earned and continue to earn millions of dollars thanks to the efforts of Envy.”
Envy is asking for $4 million after initially suing for $3 million.
The amended complaint and counterclaim comes after The US Sun previously reported the former teen mom 2 stars have been accused of hiding income in various secret limited liability companies.
In a letter to the judge obtained by The Sun, Envy asked to extend the time to complete the discovery process, which includes documents and financial statements, from October 30, 2022 to November 30, 2022.
Envy claimed that Chelsea and Cole “did not disclose the existence” of their LLC Dakota Ln, Down Home DeBoers, DeBoer Holding Company and Aubree Says.
The letter went on to state that William Dzombak, the manager of Chelsea and Cole, was deposed on August 18, 2022.
In the deposition, they learned Chelsea and Cole “failed to produce critical documents related to the Hidden Entities, including a series of licensing agreements and resulting revenues.”
Envy claims in his letter that during the deposition, the director said Dakota Ln LLC was formed after Envy threatened legal action.
They state in the letter that the director believed C&A LLC, which was the business used by Chelsea during her contract with Envy, had been “closed and stripped of all assets” in her deposition.
The letter continued to assert: “Defendants knowingly breached their discovery obligations and actively sought to conceal relevant entities, documents and income from Plaintiff and ultimately from the Court.
“Defendants have produced no licensing agreements entered into, any income received by, or any correspondence from the hidden entities.”
The letter continued to allege: “The defendants said they complied with the order, but failed to produce a licensing agreement and related revenue records for Dakota Ln LLC – a failure that the court alleges Dzombak’s testimony, was conscious and intentional.
“Simply put, defendants possess and are fully aware of the documents they have already been ordered to produce. Defendants’ conduct has unnecessarily and vexatiously increased plaintiff’s fees and expenses throughout this dispute. “
Chelsea and Cole responded in a letter to the judge that Envy “put inflammatory and baseless accusations on the public record.”
Envy’s original complaint was filed in 2020.
Chelsea, Cole and the other defendants responded with a counterclaim in May 2020, initially alleging that Envy had effectively withheld $150,000 from them.
Envy denied the allegations against them in his response.
Chelsea and Cole’s nasty legal war comes amid filming of their new HGTV show Farmhouse Fabulous.
The series, which is set to debut in 2023, will follow the couple as they help families renovate their homes.
Chelsea and Cole filmed for the seriesas they shared photos and videos of their renovations with fans.
The Teen Mom 2 star’s new show has arrived after she finished building their brand new South Dakota farm.
Chelsea, Cole and their four children left Teen Mom 2 in 2020.