A judge in Texas has ordered $10m be set aside for a potential payout to a woman who was defrauded out of royalties from the sale of Fifty Shades of Grey by E L James.
The Star-Telegram reported that State District Judge Susan McCoy said Amanda Hayward, who is from Australia, should put the money into an investment fund and escrow accounts until a final accounting determines how much she may owe Jennifer Pedroza, who is from Arlington, Texas.
Hayward and Pedroza were among four women who set up The Writer’s Coffee Shop, an e-publishing business that originally released Fifty Shades of Grey (now published in the UK by Arrow) in 2011, followed by its sequels later that year and in 2012.
In February a jury in Texas found that Hayward had defrauded Pedroza out of money made by the bestselling book.
The Star-Telegram said a hearing last week showed the company made up to $40m from the series’ release, and that Pedroza was entitled to 25% of this money.
Random House, which is not named in Pedroza’s lawsuit, made a deal with Hayward and James in 2012 to publish the books. Pedroza received a one-time payment of $100,000 after the Random House contract was signed, but she was not told of the full terms of the transaction.
The lawsuit says that Pedroza and Jennifer McGuire, who also worked at The Writer’s Coffee Shop and is from Waxahachie in Texas, never signed a prepared partnership agreement. But in 2011, The Writer’s Coffee Shop filed a partnership income tax return, naming Pedroza as a general partner.
Pedroza said in her lawsuit that Hayward in 2012 secretly converted The Writer's Coffee Shop into a company she alone owned. The jury determined that there was a partnership between the women.
Christa Beebe, who also lives in Arlington, settled her claims in December in a confidential agreement.