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.)
Hi Blair,
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.
Thank you
Miky
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.
and
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.
Termination Agreement
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.
