Chip Gaines Has Been Sued by His Two Former Business Partners
Chip and Joanna Gaines have created a business empire in Waco, Texas thanks to their hit show Fixer Upper. But the HGTV stars have seen that fame come with legal battles, too. Now, two of Chip's former business partners are suing him for fraud, the Waco Tribune-Herald reports.
John L. Lewis and Richard L. Clark are suing Gaines, his company Magnolia Realty, the parent company of HGTV, and the production company behind Fixer Upper. According to the lawsuit, the two are seeking damages over $1 million. They claim that Chip bought them out of the Magnolia Realty company while keeping them in the dark that Fixer Upper was about to make Magnolia a household name.
The plaintiffs were former partners with Chip in Magnolia Realty, which was started in Waco in 2007. For six years, the suit says, Magnolia was a small business with just one real estate agent in Waco. But right as Fixer Upper was getting started, Chip apparently contacted the plaintiffs about buying them out of the company. The lawsuit alleges that Chip knew Fixer Upper was going to air nationwide and feature Magnolia, but he didn't inform Lewis or Clark that at the time. Gaines ended up buying them out for $2,500 each, two days before he announced Fixer Upper would air as a special on HGTV.
Nowadays, the company is much bigger, working in many major cities in Texas. And of course, the Magnolia brand is massive. "Chip Gaines conspired to eliminate his business partners-notwithstanding their longstanding friendship-in order to ensure that he alone would profit from Magnolia Realty's association with Fixer Upper," the suit claims.
Chip's attorney, Jordan Mayfield, told the newspaper their claims are "meritless":
"We just received a copy of the petition and haven't had a chance to study it in detail. But we are generally aware of the story that Mr. Lewis and Mr. Clark are telling. We are confident that these claims will be found to be meritless, and it is disappointing to see people try to take advantage of the hard work and success of Chip and Joanna Gaines."
Chip has yet to respond to the lawsuit publicly on social media.
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