Home > News > AdultShop Sues Over Processing Woes • Bookmark   • Newsletters   • Register Search Options


AdultShop Sues Over Processing Woes

AdultShop Sues Over Processing Woes
Get XBIZ News
Oct 9, 2004 9:00 AM PDT    Text size: 
In another example of fallout over the ongoing uncertainty over credit card processing issues, AdultShop.com has initiated a multi-million dollar lawsuit against two Australian businessmen.

AdultShop's court action was brought against Dean Shannon, Steve Jones, and their company, E-Millions Pty Ltd., the Queensland businessmen who sold AdultShop their online erotica division, Today's Success, three years ago. Shannon and Jones were paid a total of around $12 million in cash and shares for their holdings in Today's Success, but the transaction would not escape controversy or the scrutiny of Australia's corporate watchdog, the Securities & Investments Commission.

It was credit-card processing problems (and the resulting plunge in share price after AdultShop issued a profit warning) that was behind AdultShop's loss, and subsequent litigation. While AdultShop was able to write off the balance of Today's Success last year, their suit in the West Australian Supreme Court against Shannon and Jones is designed to recoup a portion of their losses.

Alleging that the named parties breached the Australian Trades Practices Act, along with their contractual and equitable obligations as well as their fiduciary duties, AdultShop's 26-page writ specifies that certain claims about the benefits of merchant account processing that were made to principals of AdultShop were false.

Shannon and Jones had previously lost their merchant account agreement with the National Australia Bank due to excessive charge backs, but it was the fact that they sold their shares immediately after the six-month escrow period ended, indicating that perhaps they knew their advice was not as forthcoming as it could have been.

Court documents show that Shannon could have realized up to $7.7 million by selling his shares, while Jones could have seen around $6.3 million from the sale of his shares, on top of the $1 million in cash he had already received.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !


Cam World: Jim Austin Puts Stripchat / xHamsterLive on the Cutting Edge

Meet Jim Austin, head of business development for Stripchat and xHamsterLive. Austin helps run the two free online communities where amateur models — women, men, couples and transgender folk —... More »

Crave’s Jack Morocco Brings Fresh Perspective to Channel Manager Role

Jack Morocco must be in the right career. They’ve been hit on by Nina Hartley and already had to fend off Ron Jeremy, all in their short one-and-a-half years with San Francisco boutique outfit Crave.... More »

Cam World: Cam Star of Month BlazeFyre Loves to Be a Pleaser

Webcam model BlazeFyre certainly is looking forward to a fruitful 2017. She just moved into new digs this past month, and is eagerly anticipating another banner year as a Chaturbate web model. The naturally... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ World magazine, the industry's leading e-commerce trade publication, delivering in-depth coverage of the online, mobile and ancillary digital markets.



Mar 31 - Apr 02
Denver, CO.

Eurowebtainment 2017

May 17 - May 20
Majorca, Spain

XBIZ Retreat

May 30 - Jun 03
Miami, Florida

XBIZ Miami 2017

May 30 - Jun 02
Miami, Florida
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!