More HGTV Star Legal Drama: 'Fixer Upper' Chip Gaines Sued for Fraud
Getty
Reality TV Besties

UPDATE: Chip Gaines tweeted the following after this story broke:

Original story follows...

HGTV may have another publicity headache on their hands: "Fixer Upper" star Chip Gaines is being sued by two former partners who claim the reality star swindled them out of some serious cash.

The legal trouble for one of the network's most beloved personalities follows months of headlines about Tarek and Christina El Moussa, the divorcing co-hosts of "Flip or Flop," who are splitting after 7 years of marriage.

In a lawsuit filed in McLennan County, Texas, on Wednesday and obtained by TooFab, John L. Lewis and Richard L. Clark seek over $1 million in monetary relief, accusing Gaines of fraud after he bought them out of their business without telling them about his deal with HGTV.

According to the duo, Lewis and Clark started Magnolia Realty with Gaines in 2007. In 2013, they say Gaines "initiated the buyout discussion" with his partners while withholding knowledge that "Magnolia Realty was about to receive nationwide advertising through HGTV's Fixer Upper."

The HGTV host's partners claim Gaines "forced the sale of the business for a fraction of its true value by hiding the fact that 'Magnolia' was soon to receive nationwide advertising and branding," the suit continues. "Chip Gaines told Lewis and Clark, 'There are no assets' and that the company is 'less than worthless.'"

The suit also alleges Gaines sent Lewis a "threatening" text when his former partner "made it clear he wasn't happy with Chip trying to lower the buyout" price.

The alleged message: "You better tell Rick to be careful. I don't come from the nerdy prep school he’s from. And when people talk to me that way they get their asses kicked. And if he's not ready to do that he better shut his mouth. I'm not the toughest guy there is, but I can assure you that would not end well for [R]ick."

The two men say Gaines ended up buying out their shares in the company for $2,500 each. Two days after the deal was finalized, the suit claims Gaines "publicly announced that his show was picked up to be broadcast across the nation on HGTV."

Lewis and Clark say they "would have never agreed to sell their membership interests in Magnolia Reality for $2,500" had they known of Gaines' TV deal. The suit alleges, "Chip Gaines conspired to eliminate his business partners β€” notwithstanding their longstanding friendship β€” in order to ensure that he alone would profit from Magnolia Realty's association with Fixer Upper."

"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," Gaines' attorney Jordan Mayfield told TooFab of the suit.

"We respect the privacy of our show hosts and will not comment on matters related to their personal lives or businesses," Scripps Networks told TooFab when approached for comment, but the company is named in the suit, as well.

The lawsuit alleges, "Defendants Chip, SNI, Scripps Networks, High Noon and Magnolia Realty combined, had a meeting of the minds and conspired to commit one or more of the acts and omissions described above with the unlawful goal of wrongfully inducing Plaintiffs to sell their majority membership interest in Magnolia Realty to Chip for a fraction of its true value."

Magnolia Realty is only one part of the Magnolia brand, which also includes a construction company, a home accessory store, design firm and residential subdivision, Magnolia Villas.

Advertisement