LOS ANGELES — Fingers are pointing again in the long-running legal battle between Perfect 10 owner Norm Zada and Usenet providers Giganews and Livewire.
Giganews and Livewire, which were awarded $5.64 million in attorneys’ fees against Perfect 10 earlier this year, charged in a lawsuit Monday that Zada and the adult entertainment company haven’t paid up the sum and that $1.75 million was illegally transferred into his bank account within weeks of the award in an attempt to evade paying the judgment.
As a result, the two companies, claiming actual and constructive fraud, are seeking $20 million in punitive damages plus the $1.75 million against Zada and Perfect 10.
The legal battle has its roots going back to 2011, when Perfect 10 filed a $25 million lawsuit against Giganews and Livewire alleging direct and indirect copyright infringement claims involving Perfect 10’s images.
Perfect 10 claimed that Giganews and Livewire’s employees neglected to remove more than 165,000 images when notified; however, the two companies prevailed in the lawsuit and Perfect 10 was ordered to pay their legal bill after an appeals court dashed Zada’s hope for a reversal.
In the suit filed Monday, Giganews and Livewire said that the “illegal and fraudulent” transfers began back in 2014, when Perfect 10 began to realize that the legal fight against the companies was souring.
“As of now (over two years since the judgment), Perfect 10 has not voluntarily paid any amount of the judgment,” the suit, filed at Los Angeles federal court, said.
“Instead, Perfect 10, through the unlawful acts of Zada and in conspiracy with him, has intentionally avoided satisfaction of the judgment through a series of fraudulent transfers of Perfect 10’s corporate assets to Zada’s personal possession.”
Monday’s lawsuit also claimed that Zada continues to operate Perfect 10’s business while disregarding satisfaction of the judgment.
Zada told XBIZ today that the lawsuit filed Monday was “outrageous,” particularly since he recently offered to pay Giganews and Livewire the “full amount.”
Zada said that, with interest, $5.819 million was offered to Giganews and Livewire to settle the debt — $2 million in cash and a $3.819 million loan on his house.
“They turned that offer down, which clearly showed that I had no fraudulent intent when I removed some of the excess cash that was in the Perfect 10 bank account that was owed to me and which I had contributed to that account,” he said.
In Monday’s complaint, Giganews and Livewire are suing Perfect 10 and Zada for violation of two statutes involving actual and constructive fraud. They are seeking an injunction over asset transfers, along with the alleged unlawful transfer of $1.75 million, plus $20 million in punitive damages.