As part of his defense against WorldVentures seeking a preliminary injunction against him, former President Eddie Head filed a declaration on March 24th.
Head is joined by Byron Schrag, Izhak Ben Shabat, Matt Morris and Muzafer Najfi, who each filed separate declarations a day earlier on March 24th.
- Kenneth “Eddie” Head – hired by WorldVentures in 2007, served as Creative Director, Vice President of Marketing, President of Americas, Co-President and President, resigned in January 2021, now President of Seacret Direct
- Byron Schrag – joined WorldVentures in 2005, Team Leader and President’s Advisory Council member, still paying WorldVentures subscription but now a Seacret Team Leader
- Izhak Ben Shabat – Seacret co-founder and CEO
- Matt Morris – joined WorldVentures in 2007, Team Leader and President’s Advisory Council member, still paying WorldVentures subscription but now a Seacret Team Leader
- Muzafer Najfi – hired as Vice President of Field Development at Seacret in 2015, left that role to become a Seacret Agent in Jan 2018 (still appears to be more than an Agent based on his declaration though)
I felt as co-founder and CEO of Seacret that Izhak Shabat’s declaration deserved its own write up.
Seeing as there’s considerable overlap between Shabat’s declaration and the other four, I felt it’d be more useful to group main themes and the relevant text from each declaration.
I’ve headlined these themes below in no particular order. Together they provide inside into WorldVentures collapse and eventual bankruptcy, from five distinctly different perspectives.
Wayne Nugent might be a control freak
Izhak Shabat: I led the negotiations over the CMA on behalf of Seacret.
I mostly interacted with Nugent, who told me that hemade all of the important business decisions for WV and demanded that his counter-negotiatior be the person who made all of the important business decisions for Seacret.
Muzafer Nafji: Shortly after that first call, I was involved in another call with Nugent, Head and Ben Shabat.
Nugent told us what percentage of ownership he has in WorldVentures.
he told us at least 20 times during the call that he makes the decisions for WorldVentures.
Nugent told us he wanted to let us know who made the decisions, and wanted to make sure he was talking to a decision maker for Seacret.
Nugent told us we did not need to involve others since he makes the decisions.
WorldVentures approached “Jeunesse and others” prior to Seacret
Eddie Head: WorldVentures began looking to raise capital again in early 2020 to address its financial difficulties.
I became aware that WorldVentures began to have discussions with Jeunesse and others and ultimately, Seacret.
Izhak Shabat: In the spring of 2020, I received word through a contact at the beauty-company Jeunesse that WV might be interested in restarting negotiations with Seacret.
WorldVentures’ co-marketing agreement with Seacret “performed poorly”
Eddie Head: In early October 2020, (Bo) Short told me that Ben Shabat thought the Co-Marketing Agreement was performing poorly and that he did not want the product expense exposure and therefore had decided to terminate the Co-Marketing Agreement.
Shortly thereafter, I received a call from Ben Shabat who told me that Seacret wanted to terminate the Co-Marketing Agreement.
Izhak Shabat: Several months after the CMA was executed but only a few weeks after WV began offering Seacret products to its members, I started hearing rumors that WV’s financial condition was continuing to deteroriate.
It was also evident from Seacret’s sales data that WV’s sales representatives were not motivated to sell the Seacret products that were offered under the CMA.
Wayne Nugent “was furious” when word of WorldVentures pending bankruptcy got out
Eddie Head: (during the co-marketing agreement termination call with Izhak Shabat)
Ben Shabat said he had information that WorldVentures was on the verge of bankruptcy.
This was not as Bo Short had described their conversation and I asked Ben Shabat to be patient and let me talk to Nugent.
I told Ben Shabat I was not aware the bankruptcy claim and wanted to verify the claim. I asked Ben Shabat to give me 24 hours.
I then called Nugent to let him know what Ben Shabat had told me. Nugent was furious.
Nugent had suspected he was being undermined from within the executive team and this seemingly confirmed the suspicion.
Nugent and I called Ben Shabat to discuss this news. Nugent asked Ben Shabat who was the source of this information.
Ben Shabat declined to provide the source stating that he had a personal commitment not to divulge the source.
Michael Poates’ and Bo Shorts’ attempted WorldVentures coup
Eddie Head: Nugent and I called Poates, WorldVentures’ Chief Operating Officer.
Nugent asked Poates to contact Ben Shabat to reassure him, try to dissuade him from canceling the agreement and to determine his level of interest in a potential partnership or investment.
Poates called Nugent and me back the next day and told us that Ben Shabat does not want his reputation at risk, that he has invested over $2 million in inventory and is highly exposed.
Poates told Nugent and I that Ben Shabat did not want to continue the Co-Marketing Agreement.
Poates also told Nugent and me that Ben Shabat had no interest in investing or partnership or discussion a potential acquisition.
After the call with Poates, Nugent and I spoke privately where Nugent shared his doubt in the veracity of Poates’ account of the call with Ben Shabat.
We decided to call Ben Shabat directly and ask for clarification and thank him for his partnership.
After Nugent shared what Poates had claimed about his call with Ben Shabat, Ben Shabat responded with surprise and anger that he would be misrepresented.
He stated that he had “not told Poates that he was not interested in partnership” and in fact had stated that he “was willing to help in any way that he could.”
Nugent and I openly expressed our concern at the inconsistency and asked Ben Shabat to come to Dallas to discuss a deeper partnership privately.
As stated, after receiving the October 6, 2020 email from Ben Shabat, Nugent invited Ben Shabat to discuss to discuss an investment or acquisition.
That evening, Ben Shabat asked me if “Wayne is serious about the discussion this time.”
He reminded me of the month of negotiations four years ago that resulted in no deal, lost time, attorney’s fees and distraction.
I told Ben Shabat that I believed Nugent was very serious, we just needed to determine the best way to partner.
The next day, I met with Nugent and Ben Shabat in Frisco at the Marriott Legacy.
We discussed different directions that Nugent and Ben Shabat could pursue moving forward, including investment, merger or acquisition.
We met again the following morning at Nugent’s home where we outlined the deal points that would ultimately form the foundation for an APA.
In order to save WorldVentures’ business from failure and to give the agents an opportunity to earn commissions, Nugent acknowledged either a merger with or sale to Seacret was the most viable option.
He openly shared his concerns that any private equity partner could be successful and that the proposal shared with him most recently by Poates would result in loss of his ownership and an unknown brand, leadership and management would be put in place that the field would not follow.
He described the PE option as having no chance of success.
Izhak Shabat: Najfi informed me that he had been contacted by WV’s President Bo Short to arrange a conference call me with me, Short, and WV’s COO Michael Poates.
Poates … told me that he and Short intended to sideline Nugent (by threatening a criminal referral), fire Head and most of his sales team, and take control of WV.
Poates then offered to facilitate the sale of WV to Seacret for $15 million.
In exchange, Poates and Short wanted me to agree to give them and other WV executives 49% of the shares of the combined company.
I ended the call by declining their offer and resolved to communicate directly with Nugent, as the owner and CEO of WV, about the issues raised by Poates and Short.
Bo Short was hired as WV’s President in or around September 2020. He appears to have been fired shortly thereafter.
Izhak Shabat: Nugent fired Short after receiving my information but kept Poates on the board because Nugent said he felt Poates could be “managed”.
In February 2021 Sharing Services appointed Short CEO of Elevacity, which was shortly thereafter renamed to The Happy Co.
Izhak Shabat: As the two sides were going back and forth trying to finalize the APA, Poates called me and urged me to consider including Rovia in Seacret’s offer.
Poates also represented to me that if Seacret offered to give him and several other current WV executives an ownership stake in Rovia, he would make sure that the sale of Rovia would be consummated.
He also reiterated his plan to push Nugent out of the company.
Several days later on December 12, 2020, I called Poates and recorded the call.
Poates repeated his proposal, including volunteering that he had “pre-borrowed” $1 million to invest in the transaction and that Rovia’s “stock will sky rocket” after closing.
I did not agree to Poates’ scheme, and Seacret did not include Rovia in its purchase offer at that time.
Muzafer Nafji: On October 1, 2020, I was on a Zoom call with Ben Shabat, Poates and Short.
Poates primarily spoke on this call.
Poates told us that his uncle was the founde rof Jack-in-the-Box, that Poates had been a track star, and that he had been an executive chef in California, and later moved to Chandler, Arizona, where I live.
Poates told us he had operated a Papa Johns franchise, and he bought 180 restaurants, went to Dairy Queen and put in it or a related entity into bankruptcy. Poates told us he had consulted for restaurants.
Then, Poates went into details of WorldVentures.
Poates talked about WorldVentures’ EBITDA and its debt.
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization”.
Muzafer Nafji: Poates told us that WorldVentures’ EBITDA last year was 4.5% and that he had taken the EBITDA to 10%.
Poates told us that WorldVentures had $118 million in debt, and paid of [sic] $10 million in debt at 30 cents on the dollar.
Poates told us that he was reducing overhead, and that business was struggling.
Poates explained that WV owed Rovia $4 million in outstanding trips, and WV owed its leading sales representatives $26 million.
Poates told us that WorldVentures made $150 million revenue, 95% from membership and 5% from travel.
The Senior leader, Tom Montgomery, was owed about $5 million which was due November 1, 2020.
Poates told us that once WV failed to make its payment on November 1, he planned to terminate Head and push out Nugent.
Poates said there were two situations, either an asset purchase or a chapter 11 bankruptcy.
Then, Poates said he would go to the “feds” about Nugent.
Poates said that whoever would do the asset purchase with them would get 51% and the other 49% would go to WV’s executives, who would offer a small percentage of ownership to other WV employees.
Poates and Short would negotiate with leaders and let them know they would get 25% down of what was owed, and the rest paid out in payments if the leaders would sign a two-year agreement that they would not leave for another company.
Poates said Head would be pushed out of the company and Nugent could not be part of the asset purchase because it would be illegal.
Poates said that if Nugent went along, Nugent would be brought in afterward as a founder, but that he would not have any ownership interest.
Poates said they would pay Nugent $1-2 million to be the face of the company.
We asked how Nugent felt about this plan.
Poates said that they had Montgomery, the senior debt holder, on board, and that Nugent has no way of paying the senior debt.
Poates said Nugent had personally guaranteed the load on the senior debt holder.
Poates said that Nugent would have no choice but to agree to this plan because WV had information that could put Nugent in “jail”.
In this Zoom call, Poates and Short asked for $15 million from Seacret and that that amount would pay off senior debt, and pay other debt at 66 cents on the dollar.
I asked Poates why he was proposing 51% and asked where the other 49% would go.
Poates said the 49% will go to the executives, that they would offer some employees a percentage for ownership, and save a percentage for the future.
Poates told us that he has other people ready, three or four, to do the asset purchase.
Poates said they could not pay the rent and he was negotiating the rent, which was another $30 million in debt adding to a total of about $143 million in debt.
Poates said $15 million would do it, and Poates would stay on if they wanted, and help run the company.
Poates said Short would run the field, Poates would run the company, and Nugent would just be the founder.
Poates said they would lose some business with this but they were OK with that.
Poates explained that he believed Seacret would be the best partner to purchase WV’s assets, and Seacret would be in the best position to hire WV’s sales representatives and save WV’s business model.
My impression was that this was Poates’ plan, not a proposal. He seemed to have it all figured out.
Poates said they thought Seacret was the best one if they come in at $15 million.
Poates indicated that he would make sure the deal happens if Seacret agreed to these deal terms.
He also asked us to keep this conversation private.
While on the Zoom call with Poates, Short and Ben Shabat, Short texted me saying that Poates was being careful not to trash Nugent and Head out of respect of offices.
Short stated Poates knows Nugent and Head are the problem.
After this call, Poates and Short informed us that all future communications would be with them and not with Nugent or Head.
Poates led us to believe that WV was terminating Head and that Nugent was being pushed out and would no longer have decision-making authority.
After the Zoom call, I told Short that Seacret will not do $15 million. Short told me he would not either.
I told Short that Seacret does not want the Co-Marketing Agreement if WorldVentures is filing for bankruptcy.
I explained that Seacret had concerns that WV’s impending bankruptcy could harm Seacret’s brand, and Seacret had concenrs about WV’s plan to get rid of Nugent and Head.
I told Short that Ben Shabat drafted a document to terminate the agreement because of the potential bankruptcy filing.
Short told me from that point that all communications should be done through Short and Poates.
Short asked that Ben Shabar send the agreement directly to Poates.
Short asked if Ben Shabat would say that lack of sales was the reason for terminating the agreement, otherwise Nugent and Head would feel no responsibilitiy.
Short told me he would talk to Poates.
Short told me that he and Poates wanted Seacret to say it was unhappy with the agreement because of the lack of sales.
The truth is that Seacret wanted to terminate the Co-Marketing Agreement because of Poates’ statement regarding the possibility of bankruptcy, and because of Poates’ plan he described on our October 1 call.
Later, Short sent me a press release to send to Ben Shabat.
Short told me that he and Poates had planned out what would happen after Seacret was out of the Co-Marketing Agreement.
Short told me that Head or Nugent would have to sign the termination agreement because they signed the original agreement, and it is better that they sign the termination agreement to take responsibility for the deal not working rather than Poates.
I subsequently went to Dallas, Nugent invited me and Ben Shabat to meet with leaders at the Renaissance Hotel.
Nugent invited us to dinner after that meeting.
At dinner, Ben Shabat told Nugent that he had a conspiracy going on at his company and that senior executives are planning to take over.
Nugent asked if it were Poates and Short.
Ben Shabat said yes.
Nugent asked how he knew. Ben Shabat said he could not go into details, but he was giving Nugent a heads up because it was his company.
Nugent said he will take care of it.
WorldVentures served Seacret Direct a cease and desist
I believe the timeline for this is October 2020.
Muzafer Nafji: The Following week, Ben Shabat and I were planning to go back to Dallas for a metting with Nugent, Head, Call and the leaders.
I flew to Dallas and Ben Shabat joined the meeting by Zoom.
Nugent was attending the meeting by Zoom as he was apparently driving to the meeting.
During that meeting, Seacret was served with a cease and desist letter. I left the meeting.
I went back to the meeting and told the leaders I could not be there because Seacret had been served a cease and desist.
Then, I went and met with Nugent in his car at the hotel for forty-five minutes.
Nugent told me the cease and desist was not from him. I asked who it was from, and said it makes no sense since you invited us here.
Wayne told me he knowns the leaders haven’t been paid and said “you don’t know what I have gone through.”
I asked how you could invite us here and then serve a cease and desist.
Nugent said I didn’t do it, there are other lawyers involved. Nugent said everything will be OK, that he just needed to deal with this right now.
I then left the hotel.
That evening, Nugent invited me to dinner with him and the leaders.
I said I thought you had a cease and desist. Nugent said I am inviting you.
At dinner, we discussed what happened and potential solution.s
Nugent tried to reassure everyone at dinner that everything would work out.
Nafji doesn’t elaborate any further on the served cease and desist.
WorldVentures’ non-payment of commissions
Matt Morris: In 2020, after COVID-19 (hit), WorldVentures was having financial issues. Representatives were beginning to leave WorldVentures and the leaders were becoming concerned.
By the fall of 2020, many of the sale representatives were not being paid.
I was receiving a daily barrage of calls from representatives with financial issues asking about payment of commissions.
Sales representatives were leaving and most of the team leaders were ready to leave.
Things continued to get worse and worse.
As agents were not being paid, representatives stopped working which made the financial situation even worse.
WorldVentures was unraveling. I thought WorldVentures was going to die a slow death.
Byron Schrag: WorldVentures began having financial problems in 2016 and 2017 and had experienced difficultly paying the team leaders over the past few years.
In the past, we were able to work together to create strategies to deal with the WorldVentures’s financial issues and get past them.
However, in 2020, the financial problems after COVID-19 became much worse throughout the summer of 2020 as the slowdown with travel impacted sales at the company.
Representatives were beginning to leave WorldVentures and the leaders were becoming concerned.
By the fall of 2020, the company stopped paying commissions to all of the sale representatives—not just the leadership.
As a result of the non-payment of commissions, sales representatives continued to leave WorldVentures for other opportunities.
Many of the team leaders including myself were taking calls from representatives who had no money for their mortgages and care payments [sic].
In order to try to retain our downline, many of the team leaders, including myself, began to send money to our team members to help with personal expenses such as mortgages and car payments.
Throughout the summer and fall of 2020, the team leaders were watching an erosion of the field as representatives left for other jobs such as other network marketing companies and selling real estate.
This erosion of the data base and the continuing worsening of the finances of WorldVentures caused me and the other team leaders to have great concern about the future of WorldVentures.
Eddie Head: Over the past few years, I have loaned hundreds of thousands of dollars out of my own pocket to the company to pay commissions, contractors and to keep the lights on.
I have paid light bills, rent and mortgages for representatives who couldn’t because of our delays, and foregone repayment of my own expenses for more than a year and a half to save the company cashflow when it was most needed.
Ultimately, I was not repaid all of my expenses and simply trusted my contributions and intentions would be reciprocated.
Izhak Shabat: Nugent was strongly pushing for an agreement as soon as possible because WV’s sales representatives had not been paid the commissions they had earned for months and were voicing their intent to leave the company.
As I discovered later, WV’s failure to pay its sales representatives was a problem of its own making.
Poates told me that WV had funds to pay sales-representative commissions, but chose to pay other creditors instead because of concerns over an involuntary bankruptcy filing.
Muzafer Nafji: I subsequently went to Dallas, Nugent invted me and Ben Shabat to meet with leaders at the Renaissance Hotel.
During the meeting, WV’s sales representative leaders were pressuring the WV executives to work out their differences and make a deal with Seacret.
The sales representatives were owed a lot of money, and it was getting worse every month.
The leaders wanted their downline representatives to be able to make commissions, especially with the holidays coming up.
The leaders told Nugent that WV needs to get a deal done, and Nugent reassured them that it will happen.
Seacret a savior for WorldVentures distributors not getting paid
Matt Morris: I was very excited about this opportunity to work with Seacret because there was hope that we could keep the team and database intact and continue working together.
I viewed the possibility of working with Seacret very positively because, otherwise, WorldVentures was going to simply die out.
At the mid-October meeting held at the Renaissance Marriot, the team leaders basically told Nugent that a decision had to be made that day about whether the Seacret transaction would go forward or not.
The team leaders indicated to Nugent they were ready to leave if a deal was not done.
Nugent did not announce a decision at the meeting.
That night, I attended a dinner with other team leaders.
At that dinner, we basically said goodbye to each other and told each other that “we had a good run”.
I believed it was the end of WorldVentures because at dinner that night, all of the team leaders indicated they were planning to leave.
Shortly thereafter, I learned that the Seacret Direct transaction was going to forward.
The next weekend, WorldVentures held an in-person event in Dallas and officially announced the move to Seacret.
Approximately three hundred people attended the event and we went over the plan for moving to Seacret.
Nugent presented his vision for the union and promised everyone that we would have travel through Seacret, we would have events as we had and that all of the leaders were in this together including himself, Head and Marc Accetta.
I mid November, I had a conversation with (Michael) Poates.
I contacted Poates to get some answers on the bankruptcy process and how it was going to work.
During that conversation, Poates indicated that the deal with Seacret was the best option.
He indicated he would have loved to continue to run the company but that the Seacret deal was the way to go.
I believe that WorldVentures would have died as a company if the representatives and team leaders had not been able to move over to and work with Seacret.
In addition, I and other team leaders encouraged the representatives to continue to pay their membership in WorldVentures even after joining Seacret.
Byron Schrag: During the fall as conditions deteriorated, all of the team leaders were looking for options such as a move to other network marketing companies but they did not want to leave WorldVentures.
Many had been at WorldVentures for a long time and the leaders liked the company and culture.
At some point and as an interim solution to the problems, Wayne Nugent and Kenneth “Eddie” Head put together a deal so that the representatives could start selling products of Seacret Direct, LLC so that the representatives could start earning commission.
As things became worse, I learned that WorldVentures was exploring a deeper relationship with Seacret, which made sense because the representatives were already selling its products.
Nugent and Head started talking to the team leaders about a possibility of working at Seacret.
In October and November of 2020, WorldVentures held multiple in person meetings with its own leadership in Dallas at different hotels to discuss how to put a deal together with Seacret.
Generally, these meetings were attended by six to 10 of the team leaders, who were the most trusted, strongest leadership of WorldVentures with Nugent and Head and other international team leaders attending by phone.
By late October, the team leaders were at a breaking point.
By this time, the team leaders had flown to Dallas six or seven times from all over the country to attend in person meetings and there was still no final decision on a proposed transaction with Seacret.
The database continued to deteriorate as representatives kept leaving WorldVentures.
Team leaders were receiving desperate calls from representatives who had not been paid in months.
At a mid to late October meeting held at the Renaissance hotel in Frisco, Texas, the team leaders gave Nugent an ultimatum and basically told him that a decision had to be made that day about whether the Seacret transaction would go forward or not.
The team leaders told Nugent that they could not wait any longer for a decision and that if WorldVentures was not going to do a transaction with Seacret, then the team leaders were prepared to leave WorldVentures.
At that point, Nugent threw a chair at the wall.
Head was also at this meeting, but his actions did not lead to Nugent throwing the chair and leaving the room.
I believe Nugent threw the chair because he was frustrated at the team leaders who were pushing for a decision because it occurred following statements from the team leaders.
The leaders continued to ask for daily updates from Wayne and the executives and shortly thereafter, the team leaders were told that the Seacret transaction was going to go forward.
I had heard that the executives in the corporate office were opposed to the transaction but ended up changing their minds, which made it possible to do the transaction.
The next weekend, WorldVentures held an in-person event in Dallas and officially announced the move to Seacret.
Approximately three hundred people attended the event and we went over the plan for moving to Seacret.
I believe that the Seacret deal was necessary to preserve the downline of the representatives.
If WorldVentures had not partnered with Seacret, then there would be no company left because the leaders were prepared to leave WorldVentures.
Eddie Head: That afternoon (October 8th), we held the X Team emergency meeting at the Renaissance Hotel.
At this meeting, Nugent shared his vision of this contemplated agreement with Seacret.
Ben Shabat was already in transit to the airport when Nugent called him to request that he change his flight and meet the leaders at the Renaissance.
Ben Shabat agreed and came to the hotel to meet the leaders and discuss the proposal openly with the group of leaders present.
The leaders were very enthusiastic and unanimously supported the union noting that there was already familiarity with Seacret to the customers and sales representatives and that they too saw unique alignment in cultures and importantly, in the compensation structure.
Both companies shared a binary-hybrid compensation plan making transition easier to execute and easier to communicate with minimal disruption to representatives’ businesses.
The discussions about an investment or acquisition progressed in October 2020.
Since WorldVentures’ business was struggling to survive and agents were leaving or threatening to leave, WorldVentures needed immediate assistance and Nugent, Ben Shabat and I worked with urgency to outline a deal.
The leaders were growing very anxious and fearful that they were out of time as very specific rumors with real knowledge of the state of the company were now being shared in the industry and many of them had received calls from other companies soliciting them to leave WorldVentures and take their teams to the competitor’s company.
Nugent again expressed his concerns that there was leak internally and actively undermining of the business and himself at the source of these rumors.
Muzafer Nafji: Before WV and Seacret even finalized any agreement, Nugent began sharing Seacret’s story with WV’s leaders and saying that WV was going to be marketing Seacret products.
WorldVentures’ non-payment to executives
Eddie Head: At the time that I signed the Employment Agreement, I also signed a Profits Participation Units Agreement and a Liquidity Units Agreement.
To date, I have not received any remuneration under either of those agreements.
Additionally, as a part of my employment Agreement, I had rights to receive the Executive Bonus Program that was to have been defined within 60 days of the effective date of the agreement.
This was never defined nor implemented, and I received no description of a plan in 2019 nor in 2020, nor did I receive a bonus of any kind for 2020 despite requesting a plan be defined repeatedly.
WorldVentures’ Seacret royalties deal is worth $12 million
Eddie Head: Under the terms of the LSA, Seacret has already paid approximately $700,000 to WorldVentures as of the February 22nd period.
This was for approximately 10 weeks of earnings given the mid December launch to their global audience.
Once completed, the Royalty payments will equal $12,000,000.00 merely for access to the database but no ownership in any asset of the Debtor.
WorldVentures used Seacret to get rid of “expendable” employees and avoid severance payouts
Eddie Head: In furtherance of the proposed merger with or sale to Seacret, on November 10, 2020, Nugent, on behalf of WorldVentures, sent a Letter of Intent to Izhak Benshabat, Chief Executive Officer of Seacret.
To that end, Debtors contemplated that certain of Debtors’ executives would be hired by Seacret.
A list of employees necessary to support the smooth transition between the companies and ongoing field representative/agent and sales support was identified by Nugent and me after a request from Poates.
These employees and contractors were asked to forgo their severance as all were identified as expendable in the Debtors’ workforce reduction efforts.
Poates personally added my name and Justin Call to this list of employees for whom Seacret would be allowed to hire.
I discussed this list with Nugent who approved the list.
During the time that Seacret was negotiating with WorldVentures on the asset purchase agreement, I continued to have discussions with Poates on the best time for me and Justin Call to move over to Seacret.
Poates asked that Call and I stay on until the bankruptcy was filed to help sustain the field and maintain their memberships with the Debtor as well as help to complete the negotiation of the APA.
We openly discussed my six-month severance package, which I was entitled to receive but agreed not to take in order to benefit the estate.
We agreed that I would provide two weeks’ notice and that I would not go to any other company besides Seacret.
We also discussed openly that I would not work for any other competitor and in fact, I declined the solicitations of others as agreed.
Poates committed to me that he would give me the alert when WorldVentures intended to do another workforce reduction, and that he would lay off me and Call to save WorldVentures the expense of my 6-month severance.
On December 29, 2020, Poates called me to tell me that the time had come for me to move over to Seacret.
I asked Poates how he would like to handle this. Poates suggested that my resignation would provide the best benefit to the estate.
I committed that I was only going to Seacret and I told Poates I would help in any way that I could with the transition.
On December 31, 2020, I submitted my resignation.
In reliance on the representations made to me, I resigned to go to work for Seacret rather than receive my six-month severance.
Izhak Shabat: I became aware that WV was executing a workforce reduction that included multiple high-level employees.
As part of this process, Nugent contacted me and asked me to consider hiring some of WV’s employees to assist in the transition to Seacret and so that they could be removed from WV’s struggling payroll.
Poates also made the same request.
For example, on a call with me on November 17, 2020, Poates repeatedly requested that Seacret hire several WV employees in order to help avoid costly severance payments and WARN Act issues.
WorldVentures executives paid themselves “six figure bonuses” leading up to bankruptcy
Bear in mind these bonuses were also paid while distributors had gone unpaid for months.
Eddie Head: In contrast (to me not receiving any bonuses), the other executives received 6 figure bonuses, the highest ever paid to employees in 15 years, that started in mid 2020 and completed in November 2020, just weeks before the filing for bankruptcy while no residual commissions were being paid to the sales representatives.
I learned through depositions that Poates, Haynes and potentially other executives paid themselves six-figure bonuses in the time leading up to the bankruptcy filing.
In total, more than $750,000.
I did not receive any such bonuses even though the Employment Agreement provided that I would be paid a bonus.
Izhak Shabat: Shockingly, I later learned that WV apparently did have the funds to pay Poates, Paul Jenkins (WV’s Chief Technology Officer), and Eric Haynes (WV’s Chief Legal Officer) bonuses totaling $750,000 in August and November of 2020.
Eddie Head claims WorldVentures’ criminal conduct in Taiwan predated his appointment
Eddie Head: I understand that I am also subject to prosecution in Taiwan for activities that predated my appointment to the Directorship of that entity.
There were no other executives that would agree to act as a director in Taiwan including Nugent and Dan Stammen.
I have requested updates from WorldVentures on the status of that matter.
Despite the fact that WorldVentures agreed to indemnify me, I have not received any updates from WorldVentures though I understand WorldVentures has received updates form the attorney in Taiwan handling the matter.
Dan Stammen connected to WorldVentures “stalking horse” bankruptcy bidder?
Izhak Shabat: On or about February 26, 2021, Dan Stammen, a former President of WV, hosted a Zoom call with various Seacret and WV sales representatives.
On this call, a recording of which I have viewed, Stammen made numerous disparaging comments about Seacret and presaged the exact litigation that WV filed against Seacret a week later.
Stammen also told the attendees that he was coming back to WV as CEO and that he had a deal to take the company out of bankruptcy.
When asked who would be staying at WV in connection with his deal, Stammen replied that Michael Poates, Eric Haynes and Paul Jenkins would run the business.
On March 25th, the day after Eddie Head filed his declaration, WorldVentures moved to strike all five declarations.
WorldVentures argues the declarations should be stricken because they
contain testimony: (1) irrelevant to WorldVentures’ request for a preliminary injunction; (2) comprising conclusory testimony on both fact and law and narrative testimony; (3) based on hearsay or hearsay within hearsay; and (4) violating the “Best Evidence Rule”.
WorldVentures claims the filed declarations are
not only intended to distract the Court from the real issues that remain, but to attempt to impugn the character of certain WorldVentures representatives and serve as a Seacret PR stunt, presumably to use to promote its new travel business.
WorldVentures have not disputed any of the claims made in the declarations.
The one that strikes me as the most pertinent is the alleged illegal conduct of Wayne Nugent.
If WorldVentures corporate, Michael Poates and/or Bo Short are aware of criminal conduct, this needs to be reported to “the feds”.
For the record BehindMLM hasn’t seen anything beyond what’s claimed in the declarations.
Looking forward the court will rule on WorldVenture’s motion to strike. Following that a decision on the preliminary injunction against Eddie Head will be made.
There is no timeline for these rulings but I’ll continue to monitor the case docket for updates.