After being sued by their former CEO, it looks like Maker Studios‘ legal woes are just getting started. A former employee has now filed suit claiming the high-profile multi-channel network (MCN) owes him more than $19 million in stock and deferred wages.
William Watkins was hired as a producer shortly after Maker Studios was formed in 2009. He was offered a yearly salary of $90,000 for his work creating content for the network’s many ‘owned-and-operated’ channels, including their flagship channel The Station (now known as NachoPunch). However, execs at the fledgling company were concerned they might not be able to afford to pay him that much. So, they suggested paying Watkins just $1,000 per month in cash, with the remaining $6,500 to be paid in stock.
Watkins accepted the deal. However, according to the suit, Maker failed to issue Watkins any stock and started treating the unpaid part of his salary as a loan without informing him. As a result, Watkins is suing for breach of contract, fraud, negligent misrepresentation and other offenses.
Watkins claims Maker’s former-CEO Danny Zappin and co-founders Ben Donovan, and Lisa Donovan, and Ezra Cooperstein, who are all co-defendants in the suit, fraudulently assured him that his stock was “secure” when it had actually never been issued to him.
After attempting to cash-in his shares last year, Watkins claims “Zappin and Donovan’s mood visibly shifted. Donovan guardedly said that he would forward Zappin a copy of the written documentation (which Plaintiff never received).”
The suit provides detailed calculations which suggest Watkins may own between three and five percent of Maker Studios. Following the company’s acquisition by Disney for up to $950 million, that could value his shares at more than $19 million when converted from Maker’s original common stock.
With so many lawsuits coming out of the woodwork, and with so many insiders agreeing with the viewpoints of people like Danny Zappin, who filed a lawsuit alleging the company and its investors engaged in ‘constructive fraud’ to marginalize a subset of the company’s shareholders, it seems there might be more to this story than meets the eye. Here’s hoping that when (if?) the depositions begin, they’ll find their way online – Much like the -now infamous-Bieber deposition.
Check out a few clips of William Watkins’ starring in Maker Studios videos:
(He’s the guy with the epic mustache)