The feud between Verona International Holdings, WorldVentures’ current owner, and former owner Wayne Nugent is taking shape.
We initially heard of a possible lawsuit between Verona and Nugent a few weeks back.
An interpleader complaint filed by Seacret Direct against Nugent explains the parties’ payment concerns.
Spherature Investments, WorldVentures’ parent firm, sued Nugent on October 29th, according to Seacret’s November 19th court filing.
So, why didn’t I cover the initial case, which was filed about a month ago?
I overlooked it in the case docket.
As I write this, there are over 700 entries on the docket. It’s one of the busiest dockets I’ve ever seen, and even if I check every few days, there’s always a pile of lengthy entries to go through.
This one managed to sneak between the gaps. That is entirely my fault.
In light of WorldVentures’ complaint against Nugent, we find that Spherature Investments is dissatisfied with its present CEO.
Spherature Investments, LLC’s managing member and Chief Executive Officer is Nugent.
Nugent had a fiduciary obligation to the Company in his capacity as CEO.
The global Coronavirus epidemic severely impacted the Company’s already dwindling income, causing its debt load to become untenable.
The Company was a stricken vessel.
Michael Poates, Chief Operating Officer, was appointed particularly to restructure the Company’s debt.
Poates made adjustments and implemented a strategy to return WorldVentures to profitability, which included paying off unpaid commissions.
Poates was working directly with a big international investment bank, which had valued the Company between $80,000,000 and $120,000,000 and promised to raise investments that would allow the Company to settle 100% of its debts, including pastdue fees, with Nugent’s agreement.
The only difficulty with that strategy was that Nugent would have to give up his majority stake in the company.
Nugent opted to “push the ladies and children out of the way” and rescue himself rather than respect the Company’s financial commitments.
According to the lawsuit, Nugent’s botched Seacret merger put WorldVentures “into bankruptcy and caused(ed) more than $100,000,000 in damages.”
Nugent signed a Letter of Intent to sell WorldVentures affiliates to Seacret as part of the transaction (LOI).
Nugent made certain to “get his” and “get his” BEFORE the Company’s Sales Representatives received even a penny of their past-due commissions.
In fact, the LOI anticipated Nugent receiving millions of dollars from a 2.5% override on all sales produced by the Company’s Sales Representatives at Seacret BEFORE Seacret began repaying commissions to the Sales Representatives.
Nugent, however, did not stop there. The LOI provided Nugent with extra remuneration, which included:
(1) the position of Chief Visionary Officer;
(2) a high position as a Seacret sales representative;
(3) 5% membership interests in Seacret if the Company’s Sales Representatives generate $200,000,000 in sales at Seacret; and
(4) a 5% membership stake in Seacret if the Company’s Sales Representatives generate $400,000,000 in sales at Seacret.
The LOI did not allow for the payback of the Company’s general unsecured debts, in addition to paying Nugent before the Sales Representatives.
Not quite an exit-scam. It’s more of a “I’ll get paid regardless of what happens next” arrangement.
Spherature Investments claims;
Nugent purposefully excluded legal advice from the LSA agreement because he knew it was an illegal fraudulent transfer and that legal counsel would never authorize it.
The fact that the separate LOI guaranteed that Nugent would be paid millions of dollars BEFORE the Sales Representatives received even $1 of their pastdue earnings refutes Nugent’s claim that the LSA would safeguard the Company’s Downline.
The Company’s sales dropped by more than 50% once the Downline was transferred to Seacret.
While this was going on, Nugent kept his $500,000-a-year job as CEO of WorldVentures.
It is also now widely known that
Nugent, unbeknownst to the Company and other board members, has been earning commissions as a Seacret sales agent since the LSA’s implementation.
The Company has learned that Nugent was rewarded by Seacret in the sum of $1,200,000 while acting as CEO of the Company and participating in highly private talks as a Company board member.
Nugent never reported the presence of this flagrant conflict of interest to the Company or its board members, and on multiple occasions denied the existence of any conflict.
Seacret would eventually discontinue making payments to WorldVentures. They continued to pay Nugent.
Nugent’s conduct, according to Spherature Investments, “breached his fiduciary duty to WorldVentures.”
Spherature Investment also mentions a 2018 firm agreement that prohibits Nugent from “becoming a Sales Representative with Seacret.”
Each Member covenants and agrees not to become a Restricted Affiliate with any Competing Business that resides or operates in the Territory during the Restriction Period.
Nugent signed on behalf of his firm, KGS Services, LLC.
In flagrant violation of the Company Agreement’s non-compete requirements, Nugent signed the LSA and became a Seacret sales representative as a result.
Nugent has received about $1,500,000 as a result of this breach.
The Company has suffered and continues to suffer irreparable loss to its business, creditors, and ability to execute a successful chapter 11 bankruptcy as a result of Nugent concealing assets from the Company’s bankruptcy estate.
Spherature Investments’ complaint accuses Nugent of four separate causes of action.
violation of fiduciary responsibility; aiding and abetting a fraudulent transfer; bankruptcy fraud via asset concealment; and contract breach
Damages, disgorgement, pre and post-judgment interest, and legal fees are among the remedies sought.
Seacret’s Interpleader Complaint concerns $18,234 in funds that they do not wish to send to Spherature or Nugent until Spherature’s litigation is settled.
With the probable exception of WorldVentures, there’s a lot of muck here, and it’s pretty much on everyone involved (at least with respect to this particular incident).
As previously indicated, Nugent appears to have screwed WorldVentures and everyone involved for his personal financial gain.
Seacret contributed to this by engaging in some really questionable transactions. I assume that, combined with Seacret being the clear benefactor of this debacle, gave WorldVentures tremendous bargaining power in settlement discussions.
Head stated in sworn evidence that at least 15,000 Members and Sales Representatives conduct business with Seacret, and that “most” of these Sales Representatives are no longer actively promoting WorldVentures’ Services.
As a consequence of those discussions, Seacret will pay out millions of dollars in unpaid fees to top former WorldVentures affiliates.
I’m not sure if Eddie Head was aware of Nugent’s agreement, but he was certainly involved in talks that benefitted both him and Nugent.
Head was also entrusted with selling WorldVentures affiliates on a contract that eventually harmed WorldVentures and anybody who remained with them.
Spherature Investments is presently requesting access to Wayne Nugent’s tax documents from the court.
I’ll keep an eye on the case docket for developments.
19th of December, 2021 – Spherature Investments has been asked to obtain Wayne Nugent’s tax documents.