‘Fixer Upper”s Chip Gaines Sued for $1M by Former Business Partners
If you find a nail salon that keeps HGTV on the TVs, you keep that nail salon and you love it forever. There are probably better ways to spend a weekend than getting a manicure and watching people renovate houses, but most of them involve alcohol. People just love HGTV, and one of its biggest recent successes is Fixer Upper, which features Texas homes fixed-up by Chip and Joanna Gaines. Chip loves Bible passages and Joanna Gaines loves shiplap more than a toddler loves videos where people take things out of eggs, and their quest to evangelize farmhouse style throughout Texas has always seemed charming and wholesome and earnest, if a little bit obsessed with farmhouse decor and giant clocks. But now Chip Gaines is being sued for over $1 million by his former friends and business partners who say he intentionally tricked them out of their part of the business they allegedly built together.
Gaines owns Magnolia Realty, which is the real estate company through which he sells and renovates the “fixer uppers” that appear on the HGTV show.Â But according to Good Housekeeping, Gaines’ former friends and business partners John L. Lewis and Richard L. Clark say that they all owned Magnolia Realty together for six years when it was a tiny, struggling business with just one real estate agent.
Now Gaines’ former friends and partners are suing him for pressuring them to sell their shares of the company without telling them that Fixer Upper–which heavily features the company–had been picked up to air on HGTV. Clark and Lewis say that Gaines bought out their share of Magnolia Realty for just $2,500 each, because at the time that’s what they thought the company was worth. But two days after Clark and Lewis sold their shares to Gaines, Gaines announced that he and Magnolia Realty were going to be on HGTV as a TV special called Fixer Upper,Â which shortly turned into the shiplap-shilling behemoth we all know today.
Gaines’ old business partners are suing for fraud, on the grounds that they say Gaines knew the company as about to be worth a hell of a lot more than it was when he convinced them to sell the business for $5,000.
“At a time when only theÂ DefendantsÂ knew thatÂ Fixer UpperÂ had been fast-tracked for a one-hour premiere on HGTV and was on the verge of radically changing their lives and business enterprises, Chip Gaines conspired to eliminate his business partners â€”Â notwithstanding their longstanding friendship â€”Â in order to ensure that he alone would profit from Magnolia Realty’s association withÂ Fixer Upper,”Â the suit claims.
“Chip Gaines convinced plaintiffs to sell their membership interests in Magnolia Realty quickly to him before a public announcement thatÂ Fixer UpperÂ was picked up by HGTV,” the suit alleges.
They say that Gaines knew about the HGTV deal and that he intentionally misled them to get them to sell before the company jumped in value. The suit also alleges that Gaines repeatedly told them that the company was “less than worthless.”
They even allege that Gaines threatened physical violence when Richard Clark was reluctant to sell.
“You better tell Rick to be careful,” Gaines allegedly texted Lewis, according to USA Today. “I don’t come from the nerdy prep school he’s from. And when people talk to me that way, they get their (expletives) 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 Rick.”
Gaines responded on Twitter, posting first a Bible quote, and then calling out the plaintiffs for suing instead of calling him directly.
Fyi: Ive had the same cell # 15 yrs.. same email for 20 yrs. No one called or emailed? 4 years later "friends" reach out via lawsuit.. humm
— Chip Gaines (@chipgaines) April 29, 2017
Gaines’ lawyers say the lawsuit is without merit and that it’s just a transparent attempt by some former associates to cash in on the Gaines’ success and will surely be dismissed.
Fixer Upper just finished its fourth season and is about to get a spin-off series.