Two women in Texas are suing the co-owner of the Writers Coffee Shop, Amanda Hayward, for a share of the profits from “Fifty Shades of Grey” by E.L. James.
“Fifty Shades” was originally published by the tiny Australian e-book publisher and was already reaching bestseller lists internationally when Random House came calling with a reported million dollar deal. The Writers Coffee Shop, an online website, was founded by two women in Texas and two in Australia. The site was created to write and share fan fiction, which was small potatoes until James’ book came along. “Fifty
Shades of Grey,” which was conceived as a sexy, adult remaking of the characters in “Twlight,” went through a few revisions before it became an international hit.
One of the Texas founders is Jennifer Pedroza, who filed a lawsuit in Texas state court for a share of the proceeds from “Fifty Shades of Grey” and its sequels, “Fifty Shades Darker” and “Fifty Shades Freed.” She
is joined in the suit by Christa Beebe, a former staffer at the small publisher.
The lawsuit accuses Amanda Hayward of “conning” Pedroza “out of her rightful partnership interest in advances and royalties flowing from the New York Times best-selling ‘Fifty Shades of Grey’ trilogy.”
Jenny Pedroza claims Hayward, her former business partner, set up a separate business entity to deal with Random House and manage “Fifty Shades” royalties… an entity that cut her out of the profits.
According to the lawsuit, Hayward told Pedroza that the partnership needed to be restructured into an entity solely owned by her for “tax reasons.” She then fraudulently convinced Pedroza and Beebe into signing “service agreements” with The Writers Coffee Shop, and subsequently terminated both of them on Nov. 1, 2013. Their terminations were announced in an email that called their firings a “very sad decision.” The reason given was a lack of money.
Amanda Hayward then sold the rights of “Fifty Shades of Grey” to Random House. That publishing deal led to the sale of more than 100 million copies of “Fifty Shades”
worldwide. A film based on the first book, ‘Fifty Shades of Grey,’ also grossed more than $570 million in the United States and abroad. A short time later, Hayward bought a $5 million mansion, and tens of millions of dollars were being paid to The Writers Coffee Shop by Random House. The home has a gym, tennis court, pool and various other luxuries, according to a previous sale listing posted online.
Pedroza was never given her 25 percent share of those profits, and Beebe lost her guaranteed $5,000 a month from working the job she was previously guaranteed.
A Fort Worth jury decided Jennifer Pedroza was defrauded out of her share of royalties by Hayward.
The jury determined that Pedroza was one of the four original co-owners of The Writers Coffee Shop and Hayward fraudulently presented the restructuring arrangement so she could keep the Random House money for herself.
Hayward was ordered to set aside $10 million until both sides reach a financial settlement.
Sources say, Jennifer Pedroza could be awarded about $10.7 million once attorneys for her and former business partner Amanda Hayward of Australia settle on the amount she is owed, including attorney fees, court officials said.
Source: warmjello.com
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