The Profit or the Profiteer? Marcus Lemonis, star of CNBC’s The Profit, was the subject of a proposed amended complaint. He claims that he targets small businesses through his show and inflates their debts to try to take over those companies.
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A group of over 50 businesses who have been featured on NBC’s hit show “The Profit”, allege that Marcus Lemonis, the star of the show, and the network use the series to defraud small businesses.
On Saturday, a proposed amended complaint was filed with the United States District Court for Southern District of New York. It alleges that Lemonis and NBCUniversal and Machete, a production company, used mob-like tactics to take companies that appeared on “The Profit” and defraud business owners.
The amended complaint states that Marcus Lemonis “is a wolf dressed in sheep’s clothes, and a false prophet who uses fame and fortune to steal small business from everyday Americans.” “Through NBC’s television program The Profit,Lemonis portrays himself as a savior for struggling small business owners while preying upon the businesses he claims to be saving.”
According to the filing, an eight-month investigation found that at least 51 companies featured on the show were subject to a similar “hellish nightmare” and suffered humiliation, fraud and other charges.
The filing states that Lemonis “deliberately and strategically drowns these businesses with debt to himself and his entities in an effort to foreclose upon them and take their intellectual property and assets to expand his empire.”
The show’s eighth season is on CNBC. It is about Lemonis, who is also the CEO at Camping World Holdings in Lincolnshire, Illinois. Lemonis invests in a struggling company and then assists in a business turnaround.
However, small-business owners who have been on the show for years claim that there is a darker side to The Profit. Lemonis denied any wrongdoing, and suggested that any unhappy companies should take a look at the mirror.
Lemonis was not shy in his response when Lemonis was reached for comment. Lemonis states, “This feels like an enormous shakedown from people who don’t have any right to anything.”
Lemonis continued: “In every business I have ever tried to help or made grants to, made loans to, or invested to specifically related to this reality release, I’ve never received any type of payment back, including interest, expenses, or principle.
Through a spokesperson for NBCUniversal, CNBC said that they had “no comment.”
This amended complaint is part of a lawsuit that was first filed last year against Lemonis by Nicolas Goureau, his sister Stephanie Menkin and their mother Stephanie Menkin. They appeared on the show with their mother in 2014 hoping to make a deal to grow Lemonis’ family-owned clothing shop. Courage.B was a family business that Noemi Goureau started in 2008 with the Gooberry family business. It had seven locations across the country, including one in Aspen. The company also earned $5.5 million annually.
Lemonis and the family made a deal to invest $800,000. This was for a 32% share in the company. However, the shareholder agreement gave Lemonis complete control over the company’s finances, according to the complaint. Lemonis was associated with a credit line at 5% interest that was meant to fund the capital. Only $200,000 was supposed for renovations and rebranding. But Lemonis spent $2 million or ten times as much, according to the lawsuit.
Lemonis told Menkin and Goureau that they could pay Lemonis back for renovations if they wanted to cancel the deal. According to the complaint, Lemonis allegedly piled more debt on the company, made it sell inventory at a loss and bought other companies that it couldn’t afford over the years.
The original complaint states that Gooberry’s valuation has decreased from $2.6 million to practically insolvent between June 2014 and present thanks to Lemonis’ “help”.
The lawsuit seeks damages not less than $12,000,000 and includes allegations of fraudulent inducement, unjust enrichment, breach of fiduciary obligation, and other charges, including violations of Racketeering Influenced Organizations Act.
Lemonis claims that the three relatives earned about $3 million in annual wages over the years. He also alleges that $1.3 million was spent on personal expenses using the company credit card.
Lemonis says, “The good thing about America is that it’s home to the free, brave and those who like shaking you down.” “Nicolas is in serious trouble because he realizes he has done things he shouldn’t have.”
Goureau denied any wrongdoing. Goureau says that if CNBC had done their homework and listened carefully to the warnings of people, he wouldn’t have been able to use CNBC to harm people now, then and again.”
Lemonis’ ex-executive, who isn’t a party to any mediation or lawsuit, claims that Lemonis’ treatment of business owners appearing on his show was “unethical.”
The mob has a thing called a bust-out–if they owe you money they take over your company and put a lot on it…your credit is destroyed.” This ex-executive, who wishes to remain anonymous out of fear of reprisal, said that the mob had taken over his business. He’s done it. He did it to Nicolas.
Lemonis will be hosting a series on HGTV called “The Renovator” beginning next year. He also has his own podcast produced and hosted by Wondery. He flatly denies any wrongdoing.
Comcast, NBCUniversal’s parent company, did not respond to our requests for comment.