Playboy Vodka hit with $12m lawsuit

29th September, 2015 by Melita Kiely

Playboy Enterprises has been hit with a US$12 million lawsuit by its previous spirits licensing agent over allegations the firm failed to pay millions of dollars in commission fees.

Playboy Vodka

Playboy Enterprises has been hit with a US$12m lawsuit

The lawsuit was filed on Monday by Broad Street Licensing Group (BSLG), which signed an exclusive two-year agreement with Playboy back in 2012 to act as the company’s licensing agent for spirits.

The Playboy Vodka was produced by Philippines-based company VuQo Inc. and made from coconut nectar.

Playboy was allegedly set to receive tens of millions of dollars in minimum guarantees with BSLG through a 30% commission, according to court papers, as reported by the Hollywood Reporter.

BSLG claims it was promised a portion of US$2m in advance payments made in 2012 and 2013, but was told in July last year that the VuQo deal would be terminating.

However, Playboy allegedly made a direct deal with VuQo’s lead investor and the complaint stated: “Not surprisingly, this ‘new’ Playboy-branded vodka is identical to the VuQo-manufactured Playboy-branded vodka: the vodka, the bottles, the label – everything is the same.”

The plaintiff claims its agreement with Playboy constitutes entitlement to commissions for any deal made while it remains exclusive licensing agent, and for the first year after the contract has ended.

“To make matters worse, Playboy has also refused to pay BSLG commissions on $800,000 in royalty advances Playboy received in March of 2014 from VuQo, claiming – in a feat of accounting that would make Enron jealous – that these funds were ‘returned in the form of a credit to [VuQo’s lead investor] toward a future relationship with Playboy,” the complaint also stated.

BSLG argues it is entitled to commissions, while Playboy allegedly says it “independently” formed a relationship with VuQo’s investors.

BSLG has filed for breach of contract and breach of implied covenant of good faith and fair dealing with damages of at least US$12m.

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