Porn Site Builders Sue Partners for Share in Profits

Unlimited9 was netting $1.1 million a month; partners allegedly stole the company and its books

Arnon Ben-Yair
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Arnon Ben-Yair

Building porn sites on Internet is good business, so good that two partners in Unlimited9 are suing the other three for stealing the business under their nose.

Yakov Maimon and Alper Yareli, two of the partners in sex-site builder Unlimited9, are suing Teddy Sagi, Elad Cohen and Moshe Ginsburg at a Tel Aviv court, alleging that the three defrauded them out of their shares in the successful company, and stole its content, its business operations and its books to boot.

Maimon and Yareli estimate that the company was netting $1.1 million a month. Therefore, for the five months between January 2000 and June 2001, their share of the profits comes to $5 million, which they are now demanding.

The plaintiffs explain that Unlimited9 had been founded by a foursome, in equal parts: Maimon, Yareli, Ginsburg, and Amir Avni. Maimon was the living spirit behind the company, and managed the business, the suit claims.

In less than a year the company achieved turnover of $1.3 million a month.

At the start of 1999, despite a majority of the owners being in opposition (except Avni), Sagi joined, buying 10% of Yareli's holding for $150,000. Sagi reportedly gave Avni an explicit promise that he would be involved in all future business activity of the company.

Sagi's entrance to the company was based on false presentations and empty promises to Yareli, the suit alleges.

Essentially, the owners split into two factions: Avni, Sagi and Yareli on one side, with 40%, and Ginsburg, Maimon and Cohen on the other with 60%.

Now Maimon and Yareli claim that Sagi's whole purpose had been to elbow into the company to learn its methods, take it over and use it for his own purposes.

In August 1999, the suit explains, Ginsburg deserted his faction and the balance of power at the company changed. Sagi then threatened Cohen that unless he came over to his side, he'd seize his share in the company.

Cohen did pledge allegiance to Sagi's faction, against Maimon, who owns 20% of the shares.

At Sagi's initiative, the partners started seeking a new home for the company. They moved it to a new location, without telling Maimon.  The partners then severed relations with Yareli.

Maimon meanwhile tracked down the company at its new location, and demanded to see its books. He claims to have started negotiations to get his share of profits while in Israel. But Ginsburg, Elad and Sagi took advantage of his subsequent imprisonment in the U.S., for extortion and intimidation, and halted the negotiations, Maimon says.

Maimon is suing Sagi, Cohen and Ginsburg for his 20% share in Unlimited9's profits. Yareli is claiming a 10% share.

Sagi owns 46% of the Internet gaming site Playtech, which is traded in London at a value of more than a billion dollars. Cohen was one of Playtech's founders, until selling his sharesin the company for $90 million.

None of the defendants lives in Israel. In fact the suit lists the address of only one of them, Ginsburg, in Florida. Cohen's address is not cited and Sagi is said to be living in "Shikun Lamed" in Tel Aviv, but no specific address is given.