Larry Prevails Over Jimmy in Flynt ‘Family Feud’ Lawsuit

CINCINNATI, Ohio—In his ruling today in a lawsuit begun in late 2009 that pitted Flynt brothers Larry and Jimmy against one another, US District Court Judge William Bertelsman characterized the action as “essentially a family dispute that has spilled over into the courts.” Indeed, the impression one receives after reading the opinion is that the case should never have made it into court in the first place. Based on its findings of fact, the opinion of the court was utterly unambiguous; no partnership existed between the brothers, Larry Flynt owns 100 percent of the Hustler Empire, and Jimmy is not entitled to 50 percent of anything. “After a trial to the court sitting without a jury and the filing of extensive briefs by both parties, the court concludes that Jimmy has adduced no credible evidence that there ever was a partnership,” wrote Bertelsman. “Further, any interest claimed by Jimmy was released as part of a global settlement between the brothers in 1988. The following are a few salient findings of fact by the court: * In 1974, Hustler magazine was first published. Hustler Magazine, Inc. (“HMI”) was incorporated in Ohio on March 14, 1974 to publish the magazine. * In 1975, the enterprise purchased a nude picture of Jackie Kennedy Onassis from an Italian paparazzi and placed it on the cover of Hustler magazine. This vastly increased the profitability of the magazine, both for that and future issues, and marked the beginning of true success for the enterprise. * Following publication of the “Jackie O. Issue,” Larry took immediate steps to consolidate all legal ownership in the various enterprises in himself. All of the ownership interests in all the enterprises were consolidated into a parent corporation, LFP, Inc. (Ohio) in which Larry was the sole shareholder. * Jimmy admits there were never any tax returns filed as a partnership; nor was there ever a written partnership agreement. * In 1977, Larry and Jimmy were indicted for obscenity in Cincinnati. Although Jimmy did not testify, his defense was that he had no interest in the Hustler enterprises. He was acquitted. In addition, the court found, in 1978, following the attempt on his life that left Larry a paraplegic, he, Jimmy and Althea, Larry’s then-wife, “were involved in a dispute concerning ownership in the companies. Jimmy executed a general release accepting one of the companies (Leisure Time Products) in settlement of all claims and reciting that it released all claims he had, past, present and future. Jimmy denies that the plain language of the release was its true intent, but the court does not find this testimony credible, and rejects it.” During the following decades, the court found, Larry remained the sole shareholder of LFP Inc., including during the period in 1983-4 when “Larry began to exhibit extremely bizarre behavior, announcing his candidacy for President of the United States and threatening judges and President Reagan, and was sentenced to 15 months in federal prison for contempt of court. “During his imprisonment, [Larry] ran the Hustler enterprise remotely,” the court found. “He attempted to give all the assets of the company to the American Atheist Group. On one occasion during a conference call, he fired everybody at the Hustler headquarters in California.” In response to this behavior, Jimmy went to court in March 1984 and was appointed conservator of the enterprises. In his conservatorship petition, however, he declared that Larry was the sole shareholder, director and chairman of all the enterprises. “The court finds that this recitation was accurate and Jimmy was truthful in making it,” Bertelsman wrote. “As Larry pointed out in his testimony, if Jimmy was a partner, why did he need to be appointed conservator?” Following his release from prison after five months, Larry and his brother found themselves once again in court, this time following Larry’s claim that Jimmy had misappropriated company funds. Their litigation ended up going all the way to the Ninth Circuit Court of Appeals, but at each stage the court found either testimony or documentation that reaffirmed the fact that Jimmy had no ownership claim to Hustler. “The court expressly accepts Larry’s testimony that there was never any partnership agreement,” concluded Bertelsman. “’Jimmy worked for me. He was my brother. That was the extent of our relationship.’ The court so finds as the crucial fact in this case. Larry’s testimony on this ultimate issue of fact was positive and unambiguous. Jimmy’s testimony, on the other hand, was vague, evasive and inconsistent, and impeached by his own sworn testimony in other court proceedings. Therefore, the court rejects it.” Following the ruling, Jimmy was quoted as saying, “"It's surprising, but there's nothing to do but go forward. We still have some other issues to settle." Those issues, according to Cincinatti.com, “include a trademark fight over Jimmy Flynt's use of the Hustler name on his Downtown store, which he still is operating even though he leases the property from his brother.” The court has requested status reports on the remaining issues within 30 days, but Jimmy says he is determined to appeal the decision. It may be that neither brother is close to burying the hatchet. Jimmy is still probably fuming over the fact that Larry fired his sons a few years ago, after which they started their own studio using the Flynt name, which lead to further trademark litigation, in which Larry prevailed. That situation led to an by Larry to evict Jimmy from his downtown Cincinnati store. “When the eviction attempt failed,” reported Cincinnati.com, “Larry opened a competing Hustler store just a few blocks away.” In light of all this, Judge Bertelsman’s characterization of the case as a “family dispute” is the understatement of the century. As to whether the remaining court issues, or any issues, can be settled amicably and without the assistance of the court, Larry seemed to insinuate that there will not be a reconciliation any time soon. "As far as I can see, he brought it all on himself," he said. The Bertelsman ruling can be read here. Photo: Larry and Jimmy Flynt in 1977.