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TEEN Mom star Chelsea Houska’s ex-business partner has been fighting to keep the star’s financial records unsealed in their nasty $4million lawsuit battle.
Chelsea, 31, and her husband, Cole, 35, were sued by consulting company Envy for $3million in 2020 for allegedly withholding money they made from social media promotions.
Envy filed an Amended Complaint to the same lawsuit, as Chelsea and Cole’s companies Down Home DeBoer, Aubree Says, Dakota Ln LLC, and DeBoer Holding Company were added as defendants on the case with the ex-business partner now suing for $4million.
Chelsea, Cole, and the other defendants filed a counterclaim in May 2020, alleging Envy actually withheld $150,000 from them.
The U.S. Sun can exclusively reveal Envy is fighting to make Chelsea and Cole’s financial records public.
Envy argued in a letter to the judge: “Plaintiff does not believe there is any confidential material in its filing which requires sealing.
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“Defendants failed to identify which specific information should be redacted from Plaintiff’s papers nor provide any valid basis for redaction.
“Contrary to Defendants’ letter, the public’s interest in Defendants’ actions is precisely the reason to make it public. Defendants’ unspecified blanket sealing request should thus be denied.”
Envy then said in regard to their fame: “Notably, Defendants intentionally and purposefully placed themselves in the public eye, particularly with respect to the subject matter of this case—branding and endorsement of products.”
The company does not object to sealing information regarding Chelsea and Cole’s four children’s names and dates of birth, though Envy does note: “Defendants have appeared on the television show, Teen Mom 2, and upon information and belief, at the very least, referenced the names of their children on the show and in various marketing materials.”
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WANTING PRIVACY
In Chelsea and Cole’s initial request, their legal team wrote in a letter to the judge: “Defendants Chelsea DeBoer and Cole DeBoer are well-known reality television stars and influencers who have built their careers in the public eye for the past decade. This case involves claims relating to revenues they collected and that are owed to them for branding work they performed.
“In support of their motion for summary judgment, Defendants attached documents and deposition transcripts that discuss and reveal sensitive and proprietary information, including the Defendants’ email addresses, home addresses, phone numbers, and other contact information, income from specific branding deals, how much revenue they collect from each deal, what the DeBoers pay their talent manager, and other fees, including expenses that they incur in running their companies.
“Defendants seek to shield this information from public disclosure as it is highly confidential and competitively valuable information that is not available to the public and can negatively impact Defendants’ ability to conduct business.
“Public disclosure of sensitive information such as how much revenue the DeBoers collect from brands and expenses incurred will harm the DeBoers in limiting the willingness of brands to negotiate about financial terms of future deals as brands will extrapolate the terms of agreements that the DeBoers entered into with other brands and use that information to gain an unfair advantage or to refuse to negotiate at all about terms.”
JUDGE’S RULING
The judge in the case agreed with Envy, claiming that Chelsea and Cole’s letter “does not specify whether they are seeking to seal the entirety of these filings, or what redactions they are proposing.”
They have until July 5 to file another letter to “articulate what precise information they are seeking to redact in any of the papers filed under seal temporarily.”
Chelsea and Cole’s legal team filed a motion for summary judgment in June to request “dismissing the Complaint in its entirety because Plaintiff cannot raise a genuine issue of material facts as to all claims for relief against those defendants; (b) granting movants judgment in their favor on their breach of contract Counterclaims against Plaintiff; and (c) awarding movants costs, fees and such other and further relief as is just and proper.”
FEELING ENVIOUS
Envy’s Amended Complaint claims Chelsea entered into a contract with the company in 2015, while Cole signed on in 2016.
Based on the alleged contracts, they agreed to “only enter licensing agreements for the Property through Envy, to allow Envy to exclusively negotiate such agreements, to collect all resulting revenue, and to pay Envy 35 percent of all fees or royalties earned from the Property for domestic deals and 40 percent of all fees or royalties for foreign.”
Chelsea’s daughter Aubree, 13, with her ex-boyfriend Adam Lind, and her two oldest Watson, six, and Layne, four, with Cole, were involved in social media promotions as “shared clients,” according to the Amended Complaint.
The court papers claimed: “Chelsea and Cole breached their contracts by directing certain Brands to directly pay Chelsea, Cole, one of the other Shared Clients, and/or other persons or entities to avoid paying Envy Licensing Fees.
“Chelsea and Cole failed to disclose such directions and payments to Envy and did not pay the Envy Licensing Fees owed upon such sums.”
The couple also allegedly “failed to perform” 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 Chelsea and Cole “failed to disclose the existence” of the other companies.
Envy claimed company Dakota Ln LLC was “created after Plaintiff threatened” legal action.
C&A, which was Chelsea’s business that initially dealt with Envy, was allegedly “shut down, stripped of all assets, and all existing contracts.”
Down Home DeBoer was created in 2020, while Aubree Says and DeBoer Holding Company was formed in 2021.
The court docs claimed: “Chelsea and Cole now negotiate their branding and licensing agreements with the Shared Clients to be executed by, and paid through, the Concealed Entities.
“Chelsea and Cole received, and continue to receive, revenue earned by the Shared Clients upon Property through the Concealed Entities from the Brands.
“Chelsea and Cole treated the funds from C&A and the Concealed Entities as their own, and used the funds for personal purposes, including withdrawing all assets from C&A for personal use without providing any compensation to C&A.”
Chelsea, Cole, and the “concealed entities” are being sued for breach of contract and unjust enrichment.
C&A and the other businesses are being sued for tortious interference with contractual and business relationships, and unjust enrichment.
Envy claims Chelsea and Cole “received significant financial benefit from Envy’s services through the revenue they, and the Shared Clients, received as a result of Envy’s services” and “earned, and continue to earn, millions of dollars as a result of Envy’s efforts.”
COUNTERCLAIM
Chelsea, Cole, and the other defendants filed a counterclaim in May 2020, alleging Envy actually withheld $150,000 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 said 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.”
Chelsea said they owe her $154,074.62 from deals.
Envy denied the claims against them in their response.
FIGHT OVER MTV MONEY
Envy is also demanding 35 percent of Chelsea and Cole’s income from Viacom, the media company that owns MTV.
The court papers read: “Envy undisputedly worked on both the original Viacom agreement and amendments and extensions thereto during the term of the DeBoer Agreements.
“If necessary, this fact would be established through emails revealing Envy’s involvement in negotiating and revising the relevant agreements, and assisting Chelsea and Cole in complying with them.”
The court papers continue that they are entitled to “35 percent of millions of dollars of revenue from the Viacom Agreements,” as this percentage is the same amount they agreed upon for social media revenue.
Chelsea and Cole filed to deny this request.
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