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Tuesday, February 27, 2024
Courthouse News Service
Tuesday, February 27, 2024 | Back issues
Courthouse News Service Courthouse News Service

Businessman Says He Was Rolled by ‘The Wrap’

LOS ANGELES (CN) - A businessman claims in court that journalist/blogger Sharon Waxman defrauded him of his shares in her movie business website, The Wrap, and wrested control of a company he created to track Hollywood script sales.

Jason Scoggins, who describes himself as a former literary agent and the founder of Its On The Grid, sued The Wrap News and its principal Sharon Waxman, Its On The Grid, which The Wrap now controls, and executive Mark Davis, in Superior Court.

Scoggins claims Waxman and Davis bullied him into signing a "one-sided" joint-venture agreement. He claims he signed the contract under duress, and that it stripped him of his shares in The Wrap and the $100,000 severance package he received when Its On The Grid merged with The Wrap in 2011.

After the joint venture fell through, Scoggins was fired and was left with a 5 percent share of Its On the Grid, according to the complaint.

He claims that Waxman and Davis took control of Its On The Grid through a "series of lies and calculated misrepresentations" and by "fraudulent representations and coercive and extortionist tactics."

Scoggins claims that Waxman told him that though The Wrap was worth $13 million, it would be valued at $11.5 million for the purpose of calculating the value of shares Scoggins would receive as part of the deal.

After the merger was completed in January 2011, Its On the Grid became a subsidiary of The Wrap, and Scoggins became chief product officer for The Wrap and general manager of his former company, according to the complaint.

But Scoggins claims that Waxman quickly "lost faith" in Its On The Grid and told him that her company needed to enter into a joint venture with nonparty FilmFunds or shut the website down.

"Waxman and Davis, on behalf of TWN [The Wrap News] and IOTG [Its On The Grid], also seized the opportunity presented by the TWN-FilmFunds joint venture to take back Scoggins' TWN shares through a series of lies, fraudulent conduct, duress, undue influence and strong-arm tactics," the complaint states.

"Specifically, on March 5 through 6, 2012, between the hours of 7:15 p.m. and well past midnight, Waxman forced Scoggins to stay in TWN's offices and sign several completely one-sided documents before the TWN-FilmFunds joint venture could begin. In particular, Scoggins was forced to sign an unfavorable separation agreement which ceased any further vesting of the TWN shares he acquired in the merger, and required him to convert his valuable TWN shares into less valuable IOTG shares, before the TWN-FilmFunds joint venture could begin."

Scoggins claims he "repeatedly expressed his objections" to the proposal, believing he would lose his shares in The Wrap, even if the joint venture never came to fruition.

"In response, Waxman told Scoggins that the timing of his shares' conversion was inconsequential because TWN and FilmFunds were entering into a 'binding letter of intent' (LOI) whereby pursuant to its terms, the TWN-FilmFunds joint venture automatically went into effect 60 days after its signing and therefore Scoggins had nothing to worry about. Scoggins relied on Waxman's representations when deciding to ultimately sign the unfavorable documents. In reality, Waxman's representations regarding the LOI were completely false," the complaint states.

Scoggins claims that when he told Waxman he would like a lawyer to look over the deal, she threatened to fire him and pull the plug on the script-tracking website.

"Feeling extreme duress, exhaust, pressure and fear that if he did not sign the forced documents he would be fired for a made-up cause (resulting in no severance payments) and TWN would shut down IOTG, Scoggins - with Waxman standing behind him, her arms folded, snorting and tapping her feet like an impatient schoolmarm - attempted to read and make changes to the forced documents, despite having no legal training," Scoggins says in the complaint.

After he signed the documents, Scoggins says, he discovered that the letter of intent required FilmFunds to improve Its On The Grid within 60 days, a requirement he says was "virtually impossible to meet."

After the joint venture collapsed, Scoggins says, he was fired without receiving severance because he refused to release his legal claims against The Wrap.

Waxman is still running Its On The Grid, according to the complaint.

"Where Scoggins was once the 80 percent owner in IOTG prior to his relationship with TWN and Waxman - and then a 3.2 percent owner of a growing TWN - he is now a 5 percent owner in IOTG, which TWN will not grow, with no severance and no ownership in TWN," according to the complaint.

Scoggins seeks an accounting, rescission of contract, and compensatory and punitive damages for fraud and negligent misrepresentation.

He is represented by Bryan Freedman, with Freedman & Taitelman.

Famed entertainment lawyer Bert Fields, an attorney for The Wrap, told Courthouse News that Scoggins had filed his claims to avoid "written agreements he freely and knowingly signed."

"His claim that he was somehow 'forced' to sign them is pitiful," Fields said in an email. "His lawsuit is going nowhere."

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