General

Former business partners claim ‘Fixer Upper’ star committed fraud

In any business transaction, there can be a lot on line: money, reputations, partnerships and future success. However, you may not realize just how much was on the line during a transaction until years later.

For instance, two former partners of Chip Gaines, the co-host of the popular HGTV show “Fixer Upper,” claim that Gaines lied to them prior to a transaction in 2013. These lies, they argue, ended up costing them significant amounts of money and a stake in a burgeoning business.

According to reports on the dispute, the former partners say they held interests in and co-founded Gaines’ real estate company, Magnolia Real Estate Co. However, they say Gaines pressured them to sell interests for a total of $5,000, which they did.

Just days later, Gaines announced that he and his wife Joanna would be starring in the national TV show, “Fixer Upper.”

The former partners argue that Gaines knew that the show was about to be picked up by HGTV and withheld the information from his partners at the time. The TV show has since turned into a massive presence, comprised of multiple real estate companies, design product lines and even a magazine.

Gaines’ attorney – and Gaines himself – fought back against the legal claims, saying they have no merit. The former partners, according to Gaines’ attorney, are bitter over a bad business decision.

While this case has yet to be resolved, there are some important lessons that Florida business owners can take away from it.

First, avoid being pressured into any business transaction; take time to consider offers and do research on what is or could be at stake. Second, don’t wait too long to take legal action, if it becomes necessary. In this case, the former partners were just days away from the expiration of the statute of limitations for such claims, and they have faced criticism for waiting so long to file their claim.

Finally, having an outside perspective can be invaluable when you are negotiating business transactions with friends. Emotions can and do get the best of people; working with an outside party can help keep the focus on objective information and details.

Tue Aug 28, 7:44pm