BeachGrit actually does its homework and finds a treasure trove of court documents!
Is Dane Reynolds suing Quiksilver? The easy answer is no, he is not. But in law there are no easy answers. The reality is a bit more complicated.
On September 21st 2015 Quik’s Miky Picon sent an email to Blair Marlin, Dane’s manager, spelling out their desire to renegotiate Dane’s contract, as well as extend it until 2020. It had previously been set to expire in 2017. (The potential new contract was not included in court docs, though it’s safe to assume it involved a pay cut, which, coupled with an extension, make it no surprise Dane decided to walk.)
I hope you are well.
I try to move as quick as possible for the benefits of everyone here..
We put in place that offer for Dane for the next 5 years. As I already mention, we really want to give our best offer straight a head and not trying to play any games, in the respect of Dane we put one strong offer and you guys give us an answer..
You can shop around and see what you guys will decide. This offer is still strong for the market, and after all those years in the team i hope he will take the right decision to stay with us.. We will let the totally Freedom to Dane to be Dane.. Shoot, surf, all the things he like to do.. We will support any project for the coming 5 years, we will have the budget on the side for that.
I really hope you will take in consideration all the past and looking to end Dane’s career with us.. We are very loyal to all our ambassador, today Tom, Mark all those legends are still under contract with us,. Dane will be the same.. He is our ambassador and part of the Family. If he think that Pierre doesn’t like him he is totally wrong, he is just waiting to build that relationship! We all love Dane we want Dane to stay, everyone want to work with him so hopefully we will continue..
If Dane does not accept our proposal, the next step would be to ask the court to `reject’ his agreement. Following our request, it is likely that the court will treat it as though we terminated the agreement.
Let me know if you have any questions..
We are waiting to get an answer before Nov 1st 2015. After that we will consider that you are not accepting our offer.
It will give you plenty of time and hopefully you will come back to us before with a positive return.
Blair I’m open to talk any day any time, i’m here always available for sharing and make this deal happen.
An email exchange between Dane’s management and Quik heads ensued concerning altering a non-disparagement clause in the termination agreement, as well as reducing the time line regarding removal of Reynolds from Quiksilver promotional material.
From Scott Lindley at Wasserman,
Our only issue is that we need to remove the non-disparagement provision. Not because Dane intends to go around disparaging QS and its employees, but as you know, Dane has always tried to be an open book with his fans. This is one of his traits that makes him so appealing to everyone in the surf industry, including QS. We don’t want to have to quash his personality out of fear that he may cross a toe over the line somewhere.
It is really important to Dane to have the Internet content removed ASAP so I have moved that reference back to 2 weeks, rather than 1 month.
An agreement was reached, termination papers signed on November 5, 2015. It spelled out a schedule for removal of Dane’s likeness, and altered the “non-disparagement” clause to read, Each Party agrees that it shall not knowingly and/or intentionally slander or libel the other Party.
Noticeably absent from the termination agreement is any form of further payment to Reynolds, meaning he agreed to more or less walk away from his deal. Surprisingly, at no time do any of Dane’s representatives float the notion of Quik simply buying out the remainder of Dane’s contract. Or at least, not within any of the emails filed with the court.
From Quiksilver’s filing:
Nevertheless, on November 18, 2015, another lawyer, Joseph A. Eisenberg, filed proofs of claim on behalf of ten (10) different individuals, including Reynolds. Exhibit B. The proof of claim filed on Reynolds’ behalf (“Reynolds’ Claim”) was assigned Claim No. 616, and asserted a general unsecured claim in the approximate amount of $3.6 million for amounts allegedly due under the Sponsorship Agreement. Exhibit C.
Upon information and belief, neither Reynolds nor Lindley nor Wasserman informed Mr. Eisenberg that Quiksilver and Reynolds had executed the Termination Agreement before Mr. Eisenberg filed the Reynolds Claim. Regrettably, Quiksilver recently learned that Reynolds will not stand by the Termination Agreement and will not withdraw the Reynolds Claim, thereby necessitating this Motion.
The ten individuals mentioned in Eisenberg’s filing included, in addition to Reynolds: Nate Adams, Iika Backstrom, Travis Pastrana, Ken Block, Craig Andersen, Dara Howell, Kelia Moniz, Torah Bright, and Travis Rice.
As far as monies purportedly owed to Reynolds:
A. For each year from April 1, 2011 through and including October 31, 2017, Claimant is to receive Base Compensation in the amount of $291,666.67 per month. As of the Petition Date, Claimant had failed to receive the sum of $369,444.45, and thereafter Claimant failed to receive Base Compensation of $21,603.93 of such minimum guaranteed compensation. Accordingly, Claimant is entitled to Base Compensation due and to become due Claimant in the aggregate sum of $3,599,381.75.
B. Claimant is entitled to receive Incentive Compensation in amounts nod presently determinable. This Proof of Claim will be amended to include such amounts as and when determinable.
C. Claimant is entitled to receive Royalty Compensation equal to three per cent (3%) of Net Sales of products by Debtor and its affiliates bearing the name or likeness of Claimant. The amount of such Royalty Compensation is not presently determinable, and this Proof of Claim will be amended to include such amounts as and when determined.
So, what’s going on here?
During the course of a bankruptcy a company forfeits control over the type of agreements it can enter into without the court’s approval.
Had Dane accepted the termination agreement, but not filed, or had withdrawn, his claim there was a chance the bankruptcy court would not approve his termination agreement, but Dane would no longer have a claim on the balance of his contract. Furthermore, a point of contention during negotiations was Quiksilver’s ability to use Dane’s image in promotional material for one year post-termination, as specified in his original contract. It is possible, if unlikely, that Dane would see his image used to promote Quiksilver while not earning a dime. And in the case of bankruptcy proceedings creditors find themselves in a “speak now or forever hold your peace” type situation. If you don’t lay a claim to your cash you don’t see a cent.
In summary: Dane Reynolds has not filed a lawsuit against Quiksilver, but he has filed a claim against the company. Should the termination agreement be accepted it’s a near surety that said claim will be dismissed, and all parties will go about their business with no hard feelings.
If you’re interested in reading the termination agreement in its entirety you can see it here.
But, wait, there’s more!
In the course of Quiksilver’s filing they included the entirety of Dane’s contract. Interesting reading, coming at you in Part Two, later today.