Hoist by His Own Petard

Submitted by patentadmin on Wed, 05/25/2011 - 21:21

For some months, Larry Flynt and his brother Jimmy have been engaged in litigation to determine the ownership of the “Hustler Empire.” Well folks, this long-running courtroom soap opera has come to an end. Not wishing to keep our loyal readers in suspense any longer, the result is: Larry won. He is now legally recognized as the sole emperor of the porn empire. Jimmy’s claim of a partnership interest was denied.

How, the reader may ask, did the Court come to this conclusion in what it had described as “essentially a family dispute that has spilled over into the courts”? The short answer is “Jimmy has adduced no credible evidence that there ever was a partnership.” To the contrary, the judge found several facts which clearly established that there was no partnership.

1. In 1977, Larry and Jimmy were indicted on obscenity charges. Jimmy’s defense was that “he had no interest in the Hustler enterprises.” (He was acquitted).

2. In 1978, in settlement of a dispute as to ownership of the various Hustler companies, Jimmy executed a general release of “all claims he had, past, present and future.” Jimmy now denies that the plain language of the release reflects the true intent of the parties. The Court, however, found this denial to be incredible and rejected it.

3. In the late 1980’s, Larry sued Jimmy, alleging “misappropriation” (read “embezzlement”) of company funds. The court found that the issue had already been decided in prior litigation between the brothers; however, it also held that, “at all relevant times, Larry Flynt has been the sole shareholder of L.F.P. Inc. [the nudie business].”

4. Unhappy with the court’s decision in the misappropriation feud, Larry appealed. The appeal was dismissed when Jimmy executed another general release of “all claims known and unknown.”

5. In 2003, during his divorce proceedings, Jimmy gave a deposition wherein he testified that he merely worked as a “consultant” for his brother.

6. Finally, Jimmy admitted that “there were never any tax returns filed as a partnership, nor was there ever a written partnership agreement.”

In summary, the Court found Larry’s testimony to be “positive and unambiguous,” while Jimmy’s testimony was “vague, evasive and inconsistent, and impeached by his own sworn testimony in other court proceedings.”

The Lesson To Be Learned: as we have repeatedly advised, GET IT IN WRITING.

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