Writers Coffee Shop Sued By Former Business Partner Over Share of FIFTY SHADES Proceeds

Publishers Lunch

The complicated publication path of EL James' FIFTY SHADES trilogy has finally yielded legal action, as James' first publisher, Australian-based The Writers Coffee Shop owner Amanda Hayward, was sued last week in a Texas state court by her former business partners Jennifer Pedroza and Christa Beebe, for a share of the massive proceeds from the trilogy.

According to the 48-page complaint, obtained by Courthouse News, "This is a case about greed and self-dealing by Amanda Hayward in conning her business partner Jenny Pedroza out of her rightful partnership interest in advances and royalties flowing from the New York Times best-selling 'Fifty Shades of Grey' trilogy and in fraudulently inducting both plaintiffs into entering into contracts with a sham entity...It appears that Hayward also defrauded, among others, [nonparties] Random House, and E.L. James, author of the 'Fifty Shades' trilogy."

Pedroza claimed in her suit that she, along with Beebe and a third unnamed individual, were partners in The Writers Coffee Shop, and that without consulting any of the others, Hayward "tried to convert Coffee Shop into TWCS, an Australian sole proprietorship that she, alone, owned. She signed a contract with Random House for the rights to the 'Fifty Shades' trilogy, in exchange for millions in advances and future royalties but, because of her chicanery, all payments flowed to her and not to the partnership."

As such, "Hayward told her partners that the partnership prospectively needed to be restructured into an entity solely owned by her for 'tax reasons.' She then fraudulently induced Pedroza and Beebe into signing 'service agreements' with TWCS, and subsequently terminated both of them."

Pedroza and Beebe, represented by Dallas-based lawyer Michael Farris with Vincent, Lopez, Serafino and Jenevien, seek "equitable relief, including injunctive relief, the imposition of a constructive trust, damages, and to trap funds not yet paid by Random House."

Fort Worth Weekly wrote about the controversy in January, and at the time they said the third individual was Jennifer McGuire. In the article, Pedroza says, "You live and you learn. Don't just take a handshake." Pedroza said then that after Random House acquired rights to 50 Shades, "Amanda came to us and told us we had to sign contracts and incorporate for tax reasons. I never got a lawyer. I just trusted." Pedroza became chief marketing officer of the publisher, but was fired in November 2013.