Court Rules Julia Haart Does Not Have Equal Ownership of Elite World – WWD

MILAN — A Delaware Court has curbed Julia Haart’s attempts to claim that she had equal ownership of Elite World Group.

Attorney Lanny Davis, who represents Haart’s estranged husband Silvio Scaglia, held a media conference call to clarify that recent claims about equal ownership of the modeling agency made by Haart were unfounded and to challenge the Netflix filming of “My Unorthodox Life” at 70 Vestry Street, since, he said, the apartment belongs to Scaglia and not to Haart.

On Thursday, Vice Chancellor Morgan T. Zurn in the Court of Chancery of the State of Delaware ruled that Haart does not have equal ownership of Elite World Group, deliberating that Scaglia, who is chairman of the global talent agency, is the controlling owner of the group and its parent company, Freedom Holding Inc.

Haart “is therefore not entitled to the relief she seeks in Counts I, II, III and IV,” which are the four counts relating to her claims about owning 50 percent of all of Scaglia’s properties and businesses, Davis said. The judge said this expedited ruling is in “advance of my final opinion” but represents his key legal findings.

However, the judgment did say Haart remains free to pursue her other claims in the suit, including “breach of fiduciary duty” allegations against Scaglia laid out in Article V of the case.

John P.L. Kelly, a spokesman for Haart, said Friday, “It is frustrating to see Silvio Scaglia’s empty words continue to bend reality. He told everyone that Julia was a 50-50 partner, including bankers, investors, employees and Julia herself. He also avowed to their equally shared ownership stake in signed legal documents such as PPP loan applications and tax returns. Today’s order is only preliminary and not final. We will have further comment once the judge’s final decision is issued.”

During the call, Scaglia’s attorney said Haart “lied” a day earlier by asserting that Zurn’s decision was not final. “Just read the court’s decision,” he said firmly. “She knew she was lying when she said she had 50 percent ownership [of EWG]. I usually don’t accuse anyone of lying unless I have overwhelming evidence, but she lied repeatedly under oath.

“The apartment is in what is now proven company property — which I believe Ms. Haart is no longer entitled to use,” Davis said, adding that he had sent a cease-and-desist demand to Netflix and its producers, asking them to stop filming the series in the apartment. “She signed a contract with Netflix, saying that she ‘owned’ the apartment — a lie.”

Zurn’s decision comes in response to a petition filed by Haart on Feb. 11, claiming equal ownership of the company — just two days after being terminated as chief executive officer of EWG.

“This is not a preliminary decision,” Davis said.

Scaglia noted: “I always had faith that ‘fake it till you make it,’ [a motto often “promoted” by Haart, underscored Davis] would not hold up in a court of law. The challenge to my ownership of Freedom and EWG was always based on her lies, and I’m happy to have this behind me.”

“Fake it means to lie and now the lies are catching up,” echoed Davis.

Haart “must retract all inaccurate statements made to the media and business community that she owned 50 percent of Freedom, EWG or associated properties. Even after Vice Chancellor Zurn’s final order, Ms. Haart could not resist trying to ‘fake it,’ saying that the court’s decision wasn’t ‘final,’” Davis continued.

Zurn rejected Haart’s “four false claims that she owned 50 percent of Scaglia’s companies and property.”

As reported in the final order issued by Zurn, petitioner Haart brought her claims against Scaglia, relating to their joint ownership of two Delaware entities: nominal respondents Freedom Holding Inc. and Elite World Group LLC. EWG is the parties’ operating company, which Haart and Scaglia own through Freedom, EWG’s sole member.

Haart and Scaglia have each held management positions at Freedom and EWG. In February 2022, Scaglia “purported to remove Haart from her positions at both companies through a series of written consents. He wielded his claimed control of Freedom to remove Haart from the Freedom board by written consent; then, Freedom, as EWG’s managing member, removed her from the EWG board, and then Scaglia, together with the other remaining EWG board member, fired her as EWG’s CEO,” Zurn writes.

Haart filed a petition with the Court of Chancery of the State of Delaware on Feb. 11, followed by an amended and supplemented petition on Feb. 28.

The amended petition asserted that Haart and Scaglia own equal 50 percent shares of all classes of Freedom stock so that, based on that, Haart contended that Freedom is deadlocked and EWG’s affairs are irreparably frozen. “She argues Scaglia’s removal of her from her positions at both entities was therefore invalid because he did not have the ability to control Freedom,” continued Zurn, seeking judicial dissolution of Freedom.

Scaglia filed two counterclaims, seeking competing declarations that his actions were valid and Haart filed a motion to expedite her claims, which Zurn granted in March.

On March 25, Zurn entered a status quo order, stabilizing Freedom and EWG while the parties litigated their claims. The Status Quo Order declared that during the pendency of this litigation Scaglia was the sole director of Freedom; Scaglia and Paolo Barbieri were the directors of EWG;  Barbieri held the title of CEO of EWG, and Haart held no positions at either Freedom or EWG. It also placed limits on Freedom’s and EWG’s business operations.

“Though a memorandum opinion documenting that decision remains in progress, I have made my key factual findings and legal conclusions. In a two-step intended to expedite finality and steady Freedom and EWG, I am issuing this order in advance of my final opinion,” Zurn wrote on May 26. “It is hereby ordered that: Judgment will be entered in Scaglia’s favor on Counts I, II, III, and IV of the Amended Petition and on both of Scaglia’s counterclaims. Each of Haart’s claims is predicated on her assertion that she owns 50 percent of all classes of Freedom stock. Upon careful review of the trial record and post-trial briefs, and for the reasons detailed in my forthcoming memorandum opinion, I find that Haart does not own 50 percent of Freedom’s preferred stock. Haart is therefore not entitled to the relief she seeks in Counts I, II, III and IV. And for the same reasons, Scaglia is entitled to the relief he seeks in his counterclaims.  The Status Quo Order is vacated.  The parties may take up any remaining issues, including Haart’s outstanding breach of fiduciary duty claim against Scaglia in Count V of the Amended Petition, after I issue my forthcoming final opinion and order of judgment.”

— With contributions from Lisa Lockwood