Update 3:18 P.T.: Maker Studios has responded to the lawsuit filed against it by former CEO Danny Zappin with the following statement:
“The lawsuit is without merit and the allegations are baseless. We regret that Danny is taking this step and involving the Company he co-founded in litigation.”
Four Maker Studios founders, including former CEO Danny Zappin, have sued the media and entertainment company, accusing its leaders of breaching fiduciary duties and conspiring to kick Zappin out of the company.
Zappin (below) is even suing Lisa Donovan, his fellow co-founder, board member and former girlfriend.
In an effort to professionalize one of the largest networks of channels on YouTube, Maker’s board ousted Zappin as CEO in May, installing former Endemol chief Ynon Kreiz as its new leader. Zappin and his co-plaintiffs allege that his ouster was the result of a furtive plot hatched by the other board members. The suit also alleges it was destructive to the company, harming its shareholders.
“Motivated by greed and unfazed by either the illegality or repercussions of their actions, members of Maker’s board […] conspired and agreed to use their power to line their pockets with Maker's assets to deny Mr. Zappin, Maker’s then Chief Executive Officer, of all his powers, and to gut the rights of Common Stockholders,” the suit, filed in the Los Angeles Country district of California state Court, alleges.
Maker Studios has not responded to a request for comment. Read the lawsuit here.
Zappin, Donovan and popular YouTubers like Kassem Gharaibeh and Shay Butler founded the company as a United Artists for the 21st century, an entertainment company run by creatives who turned to YouTube after being stymied by traditional Hollywood.
Zappin, who never wanted to leave the company, according to several close to the company, alleges in the suit that handing control of the company to an outsider was both illegal and immoral. He accuses them of diluting stock so that they could ensure his exit.
The suit calls for the court to void "each and every purported action taken by Maker's improperly composed Board of Directors" and expel several members of Maker's board, including Donovan. Zappin and his fellow plaintiffs also demand financial rewards for damages incurred.