Joe Francis Now Faces Possibility of Incarceration

Jul 28, 2014 1:15 PM PST

LOS ANGELES — To date, former Girls Gone Wild mogul Joe Francis must pay $50,000 in sanctions — incurring $5,000-a-day fines over the past 10 days — for not handing over a 2012 Bentley Flying Spur and a 2007 Cadillac Escalade.

Both vehicles, previously Girls Gone Wild company cars, were reported by Francis to have been seized by a Mexican strip club operator after the company defaulted on a deal. As a result, Francis said he can't produce the cars allegedly taken in Guadalajara, Mexico.

But on Friday U.S. Bankruptcy Judge Sandra Klein could do more than just collect the daily sanctions and a bankruptcy trustee's attorneys fees from Francis in her July 17 civil contempt order.

Klein could incarcerate Francis if he doesn't hand over the $200,000 Bentley and aging Cadillac.

If the two cars haven't been returned by Friday, "the court will consider what additional sanctions, if any, including issuance of arrest warrants for Francis…might be appropriate,” according to Judge Klein’s 31-page order filed at U.S. Bankruptcy Court in Los Angeles.

Klein, in the order, said that Francis' story about the cars is "difficult to believe and sufficient to demonstrate impossibility."

Earlier this month, Klein also said that Francis had violated a consent order and preliminary injunction that barred him from communicating with or harassing Girls Gone Wild employees, coming within 100 feet of its offices and interfering with the trustee's control of assets.

Due to the violation, Klein imposed $40,000 in attorneys fees to a trustee and likely will grant another $20,000 on Friday.

Today, Francis' attorney, Michael Kolodzi, filed an opposition to Klein's civil contempt sanctions that could include incarceration.

In a brief, Kolodzi told the court, citing a 9th U.S. Circuit Court of Appeals case, that the judge has no authority for criminal contempt powers because of the inability of bankruptcy courts to offer the required due process procedural protections, including a jury.

The brief also noted that Francis' girlfriend, as principal of Perfect Science Labs, a company controlled by Francis, also faces incarceration.

GGW Acquisition bought Girls Gone Wild assets for $1.825 million at bankruptcy auction. The company's assets went up for sale after Francis-operated companies filed Chapter 11 in a reported pre-emptive move to stave off Las Vegas entertainment mogul Steve Wynn and his companies from taking assets as repayment for more than $30 million in gambling debts.

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