FriendFinder Claims 9 Sites Not Part of Penthouse Deal

Jun 16, 2016 10:38 AM PST

DOVER, Del. — FriendFinder Networks Inc. last week filed a lawsuit against Penthouse Global Media Inc. alleging it took control of nine adult websites that were not included in a February purchase agreement.

In a report first filed by Law360, FriendFinder and subsidiary Various Inc. claimed in a suit filed at Delaware’s Chancery Court that they inadvertently transferred ownership of nine websites to Penthouse in April and that for the past several weeks Penthouse has been redirecting visitors to its own sites.

In its brief, FriendFinder said that the company is losing revenue on a daily basis over the loss of control of the sites.

“[Penthouse’s] wrongful exercise of control and dominion over the [FriendFinder] domains is damaging [FriendFinder’s] relationship with its business affiliates, interfering with [FriendFinder’s] contractual relationship with nearly 50,000 registered members and diverting revenue away from [FriendFinder],” according to the complaint.

The suit said that FriendFinder unintentionally gave domain authorization codes to Penthouse as part of a February stock purchase agreement that included 16 affiliate companies that ran more than 1,000 domains.

After the close of the stock deal with Penthouse CEO Kelly Holland, FriendFinder began the process of transferring ownership of the domains to Penthouse.

The suit said that a Penthouse's exec allegedly sent an email in April demanding that the transfer process be sped up; the exec attached a list of 1,117 domains that needed to be transferred by May 2.

FriendFinder, the suit said, did not take notice that nine domains were included in the list that were not part of the purchase agreement with Holland.

FriendFinder claims that on May 26 it corresponded with Penthouse that it received reports that traffic was being diverted from its sites to Penthouse sites.

Shortly thereafter, two of the nine sites — BookOfSex.com and HornyWife.com — were reverted back to FriendFinder and Various’ original sites, but the remaining seven sites still redirect to Penthouse web domains, FriendFinder said.

The suit said that BookOfSex.com and HornyWife.com account for a large portion of FriendFinder revenue through membership fees and advertising revenue.

FriendFinder further said that in the first four days after the transfer of the sites was noticed, it lost out on $7,300 in advertising revenue.

In the suit, FriendFinder is seeking declaratory judgment stating that control of the nine sites belongs to FriendFinder and an injunction requiring Penthouse to return control of the sites to FriendFinder.

FriendFinder also is seeking attorneys fees and the backend costs of reverting control of the sites.

A company rep from FriendFinder declined comment to XBIZ on the suit; Holland did not respond to requests for comment.

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