Fixer Upper’s Chip Gaines is being sued by his former business partners in a million-dollar lawsuit over his ultra-successful Magnolia company.
According to court documents obtained by Us Weekly, John L. Lewis and Richard L. Clark, cofounders and former partners of Magnolia Realty, filed the suit against Gaines on Wednesday, April 26. The pair claim that Gaines bought them out two days before Fixer Upper premiered in May 2013 and paid them $2,500 each for their shares.
Lewis and Clark claim that the reality star didn’t tell them that HGTV would broadcast the show nationally and “that the show prominently featured the ‘Magnolia’ brand name” before the sale. “With this information in hand, Chip Gaines convinced plaintiffs to sell their membership interests in Magnolia Realty quickly to him before a public announcement that Fixer Upper was picked up by HGTV,” the lawsuit says.
The pair allege that Gaines — who runs the business now with his wife, Joanna Gaines — “forced the sale of the business for a fraction of its true value by hiding the fact that ‘Magnolia’ was soon to receive nationwide advertising and branding.” The lawsuit further states that Magnolia had just one real estate agent before the series aired but the company has since grown to operate in several Texas cities with more than 93 real estate agents.
The plaintiffs are seeking monetary damages as well as other benefits that they would have received as partners in the business. The lawsuit also names Scripps Network Interactive, Scripps Networks LLC and High Noon Productions, which produce the show.
Chip’s attorney, Jordan Mayfield, denied all the allegations to local news station KWTX. “We are confident that these claims will be found to be meritless, and it is disappointing to see people try to take advantage of the hard work and success of Chip and Joanna Gaines,” Mayfield said.
HGTV also issued a statement to Us Weekly, saying, “We respect the privacy of our show hosts and will not comment on matters related to their personal lives or businesses.”
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