Penthouse Sued Over AFF Acquisition

LOS ANGELES — Broadstream Capital Partners, a merchant bank that assists with mergers and acquisitions, has filed a lawsuit against Penthouse Media Group Inc. The suit alleges Penthouse breached a contact to acquire Various Inc. — the company that owns and operates AdultFriendFinder.com and other social networking sites — as a joint venture with Broadstream.

In its lawsuit, which was originally filed in Los Angeles Superior Court in December and moved to U.S. District Court in February, Broadstream alleged that Penthouse has committed breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty and constructive fraud.

According to the complaint, Broadstream first learned of an opportunity to acquire Various in December 2006, and began seeking partners with whom to submit a joint bid to acquire the company. The following month, Penthouse contacted Broadstream and “agreed to join with Broadstream in submitting a bid to acquire Various.”

In its complaint, Broadstream further asserted that in moving ahead with the joint venture to acquire Various, Penthouse and Broadstream entered into a nondisclosure agreement on or around Jan. 15, 2007.

According to the agreement, which was attached as an exhibit to Broadstream’s complaint, Penthouse agreed that “for a period of 12 months from the date hereof, [Penthouse] will not, without the prior consent of Broadstream … knowingly acquire, or knowingly provide more than 20 [percent] of the financing to any person, group or entity to acquire Various Inc. or any of its subsidiaries.”

It its complaint, Broadstream asserted that during the bidding process, Broadstream “learned that Penthouse directly contacted Various to put in a separate bid,” and “ultimately submitted a bid that was higher than the offer from Broadstream and converted this business opportunity from an opportunity for the joint venture to an opportunity for Penthouse alone.”

The effective date of the agreement as listed on the agreement attached as an exhibit to the complaint is Dec. 20, 2006. Penthouse publicly announced its acquisition of Various on Dec. 12, 2007.

In its complaint, Broadstream stated in each of its four claims that the damages would be according to proof at trial but are “believed to be in excess of $20 million.”

According to court records, the last document filed in the case was a demand for jury trial filed by Broadstream March 5.

Representatives of both Penthouse and Broadstream were unavailable for comment at press time.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Hookup Hotshot Adds TobyDick.com

Hookup Hotshot (HUHS) has added U.K. paysite TobyDick.com to its network.

TTS Opens UK Testing Location

Talent Testing Service (TTS) has opened a new U.K. location in Ware, Hertfordshire.

FSC: Age-Verification Laws Go Into Effect South Dakota, Georgia, Wyoming on July 1

The Free Speech Coalition (FSC) has published a statement regarding new age verification laws set to go into effect tomorrow in South Dakota, Georgia, and Wyoming.

Leana Lovings, Shay Sights Front 'Substance' Parody From Brazzers

Leana Lovings stars with Shay Sights in the latest release from Brazzers, a parody of "The Substance.”

FSC Responds to Supreme Court Decision on Texas AV Law

The Free Speech Coalition (FSC) has released a statement responding to last week's Supreme Court decision on FSC v. Paxton, the Texas age verification law.

Sex Work CEO Debuts Upgraded 'GPTease' AI Assistant

Sex Work CEO has introduced the new Canvas in-chat editing feature to its AI-powered, NSFW text generator, GPTease.

Little Puck Stars in Latest Episode of 'The Bottom Floor' From Adult Time

Little Puck stars in the second episode of Adult Time series “The Bottom Floor,” titled “The Second Coming.”

Haley Spades Stars in Latest From Immoral

Haley Spades stars with Charlie Dean, Matt Bird, and Dean Van Damme in a new three-part release from Immoral Productions, directed by "Porno Dan" Leal.

Octavia Red Makes Her Vampired Debut

Octavia Red has made her Vampired debut alongside Talia Mint and 2023 XMA Europas Female Performer of the Year Tiffany Tatum in the new feature “Hunters.”

Lily Starfire Fronts Latest From Brazzers

Lily Starfire stars with Kyle Mason in the latest release from Brazzers, titled "Eating Ass Is the Game."

Show More