Can Chip Gaines Fix This? ‘Fixer Upper’ Host Sued by Former Business Partners

Lawsuit alleges Gaines cheated his former partners out of profits

Last Updated: April 28, 2017 @ 3:19 PM

HGTV “Fixer Upper” host Chip Gaines is being sued by his former business partners for allegedly cheating them out of profits they could have gained from show.

Richard Clark and John Lewis are seeking over $1 million and non-monetary compensation in damages in a lawsuit that claims Gaines bought out their shares in a company, which is profiting off the show, just two days before the network picked up the now-popular series.

The lawsuit filing, obtained by TheWrap, states that Gaines profited off of Magnolia Realty — a real estate company which Gaines now has full control of — in the wake of “Fixer Upper’s” success. The company started out with one office in Waco, Texas but has since grown into six other branch offices and more than 93 agents.

Just before “Fixer Upper” was picked up by HGTV, court documents claim that Gaines had a “secret”  meeting with network executives two days before the show was picked up, in which he sought to consolidate businesses.

Gaines then allegedly contacted Lewis and Clark about a buyout decision and purchased the shares for $5,000 without letting them know about the possibility of major brand exposure.

“In summary, at a time when only [the Gaines] knew that ‘Fixer Upper’ had been fast-tracked for a one-hour premier on HGTV and was on the verge of radically changing their lives and business enterprises, Chip Gaines conspired to eliminate his business partners–notwithstanding their longstanding friendship–in order to ensure that he alone would profit from Magnolia Realty’s association with ‘Fixer Upper,'” the lawsuit states.

The documents also state the Gaines — including Chip’s wife Joanna — hid a lot of information from Lewis and Clark. While they knew about ongoing talks between the couple and High Noon Entertainment, they weren’t aware of how close it was to actually getting picked up as a show.

Gaines then allegedly lied to his partners, saying that Magnolia Realty wasn’t worth anything and had no assets.

“I really am ok w what ever [sic]. There are no assets,” Gaines allegedly texted to Lewis. “2500 as embarrassing as it is. Is not bad on 0$ invested.”

“As has become clear, Chip regarded his business partners — longstanding friends — as an impediment because they owned 2/3 of Magnolia Realty. Simply put, Chip wanted the entire pie for himself,” the attorneys for Lewis and Clark wrote.

Attorneys are seeking, among other things, profits for their clients that would’ve come around if they were still involved with the company when the show aired.

HGTV declined to comment on the issue in a statement to TheWrap. “We are aware of the pending lawsuit in Texas but, we don’t share information about or comment on pending litigation,” a spokesperson said.

“Flip or Flop” is seeing great success on HGTV. The network recently announced a new spinoff called “‘Fixer Upper: Behind the Design,” which follows Joanna Gaines as she creates her signature home designs and how it all comes together.

The couple came under fire in December after a Buzzfeed article alleged the two were part of the Antioch Community Church, which raised concerns that they were anti-gay.


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