TEEN Mom alum Chelsea Houska has been slammed in court, as her ex-business partner’s lawyer ripped her for “just not wanting to pay the $4million she owes” during a hearing.
Chelsea, 31, and her husband, Cole, 33, were sued by consulting company Envy for $4million for allegedly withholding money they made from social media promotions.
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Chelsea, Cole, and the other defendants filed a counterclaim, alleging Envy actually withheld $150,000 from them.
The U.S. Sun can exclusively reveal that Chelsea’s lawyer Peter T. Shapiro and Envy’s lawyer Matthew James McDonald faced off in New York District Court on Tuesday, April 11 in front of Judge Jennifer L. Rochon.
A U.S. Sun reporter at the hearing claimed McDonald requested a summary judgment, meaning the judge would rule on the case without a trial, and to exclude one of Chelsea and Cole’s expert witnesses if there is a trial.
McDonald also argued how it is “crystal clear” that his client is entitled to money made from Viacom, the media company that owns MTV.
Envy’s attorney said in court: “[Chelsea and Cole] are trying to undermine contracts.
“Envy sent all this money. Envy spent time making them comply. There is no justification to not pay Envy. They just didn’t want to pay because it is a lot of money.”
McDonald continued at the hearing: “Chelsea and Cole terminated contracts with Envy and spoke to brands directly. Her manager cut out Envy and split the money with the DeBoers. He wanted them to stop working with Envy, and just work with them.”
CHELSEA'S LAWYER SPEAKS
Chelsea’s lawyer Shapiro then addressed the judge, as he began: “This was not, ‘We’re tired of dealing with Envy.’ There was a long period of time that went by with Envy not paying Chelsea and Cole.
“They said, ‘Please pay us.’ There was no response, there was deflection and there were fabrications. Envy breaking the contract caused the defendants to act how they did because of the breach in contract.”
He continued that Chelsea and Cole should be the ones paid in the case.
As for Viacom, he claimed Envy is not entitled to money made from Teen Mom 2 because the contract was “no longer in effect” because of Envy’s “breach.”
Shapiro continued: “Telling the brands to stop paying Envy was the only way to ensure they would be paid. They did a lot of work and should be paid.”
The judge ended the hearing by setting a May 11 deadline for cross-motions for summary judgment, June 12 for opposition briefs and June 26 for reply briefs.
FIGHT OVER MTV MONEY
As The U.S. Sun previously reported from court documents, Envy is demanding 35 percent of Chelsea and Cole’s income from Viacom.
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.
'NOT ENTITLED!'
Chelsea and Cole responded by demanding the judge dismiss Envy’s request.
Their letter to the judge read: “While Defendants do not dispute that the parties entered into various agreements, the parties dispute whether the agreement between Plaintiff and Chelsea and Cole DeBoer extend to their work with Viacom.
“Because Chelsea had an existing agreement and relationship with Viacom prior to her engagement with Envy, Plaintiff is not entitled to any revenue previously determined.
"The parties also dispute whether there was ever an agreement to share Viacom revenue with Envy and whether Envy even performed any substantial work relating to Viacom. The parties’ agreements do not entitle Plaintiff to share in that revenue.”
Chelsea and her family appeared in episodes of Teen Mom 2 from 2011 to 2021 before starring on HGTV's Down Home Fab.
FEELING ENVIOUS
Envy initially filed a complaint in 2020 requesting $3million.
The consluting company filed an Amended Complaint in 2022 adding Chelsea and Cole’s companies Down Home DeBoer, Aubree Says, Dakota Ln LLC, and DeBoer Holding Company, and raising the amount to $4million.
Envy 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.”
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 were 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.”
HITTING BACK
As mentioned, Chelsea, Cole, and the other defendants filed a counterclaim in May 2020, alleging Envy 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 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.”
Chelsea claimed they owe her $154,074.62 from deals.
Envy denied the claims against them in their response.
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