This is yet another odd and unfortunate chapter in a thoroughly ridiculous story. Recapping the entire situation requires a novel and some financial forensics, so here is a quick hits version of the timeline to bring everyone up to speed.
How we got Here
The BeBop Channel, a publicly traded jazz company focused on the larger art space, purchased Madavor Media from its owner, Zilpin Group, LLC, in January 2023. While communicated to Madavor employees and freelancers as a good thing, the tide turned rapidly.
By May, one of Madavor’s biggest photo properties, Imaging Resource, had vanished, Digital Photo Pro, Digital Photo, and Outdoor Photographer were gone, too, and reports filed in with concerning regularity from contributors to various publications remaining unpaid.
Things seemingly improved at the end of May when online studio rental space platform Giggster reportedly purchased Imaging Resource from BeBop. That purchase fell through and is the subject of an ongoing $25 million lawsuit filed by BeBop. Giggster then acquired photography website ePHOTOzine in October.
In the background, BeBop made sweeping changes at Madavor Media, having reduced the number of employees from 32 to 21 to 10 and then, seemingly, to none.
In the BeBop Channel Corporation’s most recent financial statements, published in November, the company showed a decrease in total asset valuation from $6.4 million to $5.98 million. The financial filings show revenue of $3,851 and expenses of $449,309. As of September 30, 2023, BeBop still owed Zilpin Group $3.6 million in short-term and long-term promissory notes and had accrued $208,000 in interest.
All that aside, and there is plenty of financial information for interested parties to dig through, the focus here is on the most recent development related to a new lawsuit.
BeBop Files a Lawsuit Against Zilpin Group, Former Owner of Madavor Media
On January 17, 2024, BeBop Channel publicly stated that it had filed a lawsuit against Zilpin Group, LLC, and its owner, Jeffrey C. Wolk, over BeBop’s acquisition of Madavor Media, LLC. More precisely, BeBop’s suit is an answer and counterclaim to a breach of contract lawsuit that Ziplin Group filed against BeBop last year in an attempt to collect on debt it claims BeBop owes.
While all the intricacies and details of the lawsuit are intriguing in their own way, they are outside our scope. Rather than go piece-by-piece through the lengthy legal filing, this article will aim to hit the highlights and provide a broad overview of the case. There are also other pending lawsuits from former Madavor staff against BeBop concerning their terminations, which will also not be discussed here.
BeBop’s Demand for Extrication
The primary takeaway from BeBop’s lawsuit is that the company seeks to terminate its Asset Purchase Agreement for Madavor Media, including Zilpin’s $3,000,000 promissory note due in 2026. In pursuit of this outcome, BeBop claims to have returned all of Zilpin/Madavor’s intellectual property assets and credentials, physical property, and regulatory financial access credentials still in BeBop’s possession.
This is, per the lawsuit, “an effort” for BeBop to “disassociate itself from and sever its relationship with Madavor Media, LLC, Zilpin Group, LLC, and Mr. Wolk.”
Allegations of Financial Malpractice
Beyond attempting to disentangle itself from Madavor Media and its assets, at least what remains of them, BeBop makes significant claims against Mr. Wolk and Zilpin.
“The Counterclaim alleges several claims against Mr. Wolk and Zilpin for Breach of Contract, including a failed $50,000 closing payment, altered financial documents used to induce BeBop into the acquisition of Madavor Media, LLC, and a bad faith filing in the Massachusetts Superior Court by Mr. Wolk and Zilpin to accelerate the $3,000,000 Note against BeBop for, amongst other things, making unauthorized sales of Madavor publications in breach of the agreement,” BeBop’s press release reads.
BeBop “strongly denies” making the alleged unauthorized sales. BeBop did make sales, including selling Plane and Pilot and obviously trying to sell its photo properties to Giggster. The issue then is whether the sales were unauthorized. BeBop’s lawsuit includes email correspondence that BeBop claims proves that Wolk had authorized asset sales.
Perhaps more interesting is not whether these asset sales were allowable, but the nature of how BeBop came to own the Madavor assets at all. BeBop also makes some salacious accusations against Jeffrey Wolk and Zilpin in its new lawsuit.
The Counterclaim is filed with the addition of Jeffrey C. Wolk, the single interest owner of Zilpin Group, LLC, the Plaintiff in the original action. Mr. Wolk and his company Zilpin Group, LLC, induced Plaintiffs to purchase Madavor Media, LLC — itself a phantom company used by Mr. Wolk for other than legitimate business purposes — with a slew of fraudulent misrepresentations including the contents of The Asset Purchase Agreement, financial statements and projections, and litigation at time of sale, as well as concealment of the nature and severity of delinquent and defaulted accounts, illicit practices and uses of subscriber funds and public contest entry-fees and payouts and hiring practices of contractors.
BeBop’s lawsuit goes on to say that, in addition to returning the purchased assets to Zilpin, BeBop is also legally entitled to any future proceeds resulting from BeBop’s lawsuit against Giggster, which remains in the legal system for the time being.
Allegations of Bigotry
The lawsuit levies further attacks against Zilpin Group, LLC and Madavor Media. While citing that BeBop is a Black and female founded public company with “a stellar reputation,” Zilpin Group is “corrupt,” and with respect to Madvaor, “has been viewed in the lowest light by social media and employee review sites for the last decade.”
The lawsuit goes on to say, “In addition, Zilpin Group, LLC engages in serious racial bigotry and practices not addressed in this filing, particularly with its JazzTimes publication and Zilpin Group, LLC’s employment practices and culture which historically included only employing African Americans at the lowest levels of staffing.”
Claims of a ‘Shell Game’
Among the biggest complications in BeBop’s purchase of Madavor Media is that BeBop alleges that many of Madavor’s supposed assets were actually assets of Zilpin Group, which was effectively the “operational arm” of Madavor.
Relevant facts in sections 13 and 14 of the lawsuit are as follows:
13. On information and belief, Mr. Wolk has used the existence of Madavor Media, LLC to assign certain obligations, responsibilities and debts and generally shield those obligations, responsibilities and debts from Zilpin Group, LLC; this was unbeknownst to Plaintiffs until after the sale of Madavor Media, LLC. The reality of this mixing and mingling of Zilpin Group LLC’s concerns, when Plaintiffs were not purchasing Zilpin Group, LLC, rendered obligations under the agreement, which factored into the value of the purchase price, ambiguous and errant. For example, Mr. Wolk added in the balances of his personal credit cards to the Purchase Agreement which approached $500,000,” the lawsuit explains.
14. The Asset Purchase Agreement between the parties The BeBop Channel Corporation and Zilpin Group, LLC, because of the elements cited in paragraphs 1-13, and not discovered until well after closing, was fatally flawed because many of the requirements and obligations the agreement attributed or sought to attach to Madavor Media, LLC were actually those of Zilpin Group, LLC, however, the agreement was not a purchase of Zilpin Group, LLC.
The lawsuit goes on to call Madavor an “insolvent zombie company” that “masqueraded” as a legitimate business.
The lawsuit continues with a laundry list of information that BeBop only discovered after purchasing Madavor, including what BeBop claims were wasteful business practices and misleading financial documents, among other alleged mismanagement.
“Upon information and belief, Madavor Media, LLC/Zilpin Group, LLC was not a legitimate business with legitimate prospects to be anything but a vanity project, tax write-off or some other unknown purpose,” section 41 of the lawsuit explains.
The lawsuit says Mr. Royal accepted Mr. Wolk’s characterizations of Madavor’s business operations “in good faith.” It remains unclear precisely what sort of due diligence BeBop performed leading up to entering the purchase agreement, and if any attempts to discover the true financial state of Madavor were actively obstructed by Zilpin or simply not thoroughly conducted.
For example, in section 7 of the lawsuit, BeBop claims that based on tax returns, it is not clear who the owner of Madavor’s publications “actually was.” This seems like something that should have — and could have — been figured out before buying Madavor, even if being allegedly fed a false narrative.
Section 45 adds, “Almost immediately after closing it was apparent that the company was severely bloated with personnel and other costs which required an immediate reduction in staff and expenditures.”
This reduction in staff and expenditures very quickly went into effect.
However, despite these moves, which resulted in the cessation of many respected publications, including Outdoor Photographer and Imaging Resource, BeBop claims that there was no reasonable way to escape from a spiral of debt allegedly caused by — and obfuscated — by Zilpin/Madavor.
BeBop also claims to have not known about existing debt concerning the payment of freelance contributors to various publications, which amounted to hundreds of thousands of dollars and, in some cases, remain unpaid.
Even though the insolvency of Madavor Media, LLC existed before Plaintiff ever came on board, and which was concealed by Mr. Wolk, Zilpin Group, LLC/Madavor Media, LLC management was unconscionably granting, and being granted, bonuses all the while conducting dubious business practices such as continually entering into new contracts with freelance writers with no intent to pay the contracts and soliciting funds from the public in the way of contests for which winners and participants were not paid. These freelance writers with whom they continued to enter contracts were the very writers to whom they already had delinquent contract payments, some of whom were waiting over a year for payment. The freelance writers were taken advantage of by way of their trust and goodwill.
BeBop’s Alleged Victimhood
BeBop also alleges that it is a victim of a public relations nightmare concerning debt it had unwittingly assumed during its purchase of Madavor.
During this time, an onslaught of negative public comments emerged on social media about The BeBop Channel Corporation who, up until this point, enjoyed extremely positive reviews since its inception, and who suddenly found itself associated with the ire of freelance writers worldwide who were accusing The BeBop Channel Corporation of being scofflaws in not paying them. This became a tangled mess for a public company whose origin was to support the Arts and artists, the vast majority of whom work as freelancers or “gig workers”; this was directly in conflict with the goals of the company. Mr. Royal and Ms. Veres Royal, even with this onslaught, immediately directed staff to stop the “shell game”.
While there are plenty of exhibits included in the counterclaim, none of them relate to the supposed “extremely positive” reviews BeBop Channel had experienced, or the negative reviews concerning Madavor.
Where it Stands Today
Whether Zilpin or Madavor committed the alleged crimes, which include claims of fraud, will need to be handled by the courts. Good luck to whoever has the misfortune of adjudicating the case, should it ever reach that point. However, this story goes so far beyond financial intricacies and questions of bad business practices.
Ultimately, a celebrated photography magazine, Outdoor Photographer, is gone, and many of its contributors seemingly remain unpaid for their labor. One of the earliest photography websites, Imaging Resource, is technically still online but has no staff. Digital Photo and Digital Photo Pro faced similarly grim fates. And that’s just Madavor’s photo brands — the company also had others.
And there is really no coming back for these brands that have been left to decay, supposing they’re even still online. Every week that has gone by with websites left untouched or offline has irreparably damaged their value. Whatever BeBop has said it has handed back to Zilpin/Madavor and demands to be separated from is worth a hell of a lot less than it was when it was purchased nearly a year ago.
Image credits: Header photo licensed via Depositphotos.
Disclosure: This story was written by Jeremy Gray, the former Reviews Editor of Imaging Resource