Gene sez: As I read the following post from Willie D I’m reminded of a tarot card reading I did when Jenna first announced that she was marrying Jay Grdina on the Howard Stern show. The cards at that time indicated that the marriage would be a disaster and that behind the scenes someone was double-dealing on money issues:

Willie D poists on www.xxxporntalk.com: While Jenna and John trade rape accusations and “shut up, bitch” responses on MySpace, I noticed the following “throw-away” line [from Jenna], which I though was telling:

Quote:…i [sic] have been forced to fight for everything I busted my ass for.

After a little reading, I agree. By the looks of things, suitcase pimp John G. Grdina has been playing fast and loose with the couple’s money for years.

two notes–

–The separation petition was filed in the L.A. County Superior Court (case BD 457115), a community property state. In these cases, the court functions as a “court of equity,” and tries to equally divide up all assets and liabilities incurred during the marriage.

–the “divorce” is not a divorce petition, it’s a petition for legal separation, which asks the court to adjudicate all issues of the division of the marital estate, without dissolving the marriage. And contrary to what that others like Jason Curious state, the petition has not been granted or dismissed. An amended petition was filed this February, presumably to change the status to a marital dissolution case–she did not met California residency requirements at the time of the original filing.

There are three areas where I see contention: the Club Jenna buyout, the Scottsdale strip club, and the real estate.

1. Buyout of Club Jenna: On January 27, 2006, Playboy established a Delaware corporation, CJI Holdings, Inc., to serve as the potential acquirer of Club Jenna, Inc (“CJ,” a Colorado corporation est. in 1999) . It’s clear from this early date that no one was rushing a sale of CJ. Alas, it did happen early in PLA’s 3Q06 via a purchase of CJ’s stock. The terms reported in their FYE06 10-K was a minimum of $17.5MM, more if performance marks are set in the future (none were earned in the current FY). Assuming the deal gave PLA one quarter of revenue post-close, PLA’s annual report disclosed sales from CJ of $6.1MM, annualized to $24.4MM. Assuming a generous net income margin of 10% (or $2.4MM), CJ was sold for a paltry 7x earnings. By contrast, PLA itself trades at a P/E ratio of over 23:1 (market value of it’s stock vs net income).

If Jay is the President of CJ, why would he engineer such a cheap deal within a month of his separation? In divorce court, the proceeds of the sale would probably get split evenly (offsets notwithstanding), that’s an easy $8.5 million with no assumption of corresponding debt, since it appears CJ has no bank debt, and still continues to function as it did previously, only with new majority stockholders. Not to mention that a stock-purchase leaves him in control of the company as its President, and presumably drawing the same salary he did before. Jenna is left out as a minority Director (in the financial sense) and enjoined to various promotional opportunities to sell the brand for her new owners.

2. Babe’s Cabaret: I don’t really know or care about the place because it will be a future victim of Scottsdale zoning wars. There are a string of three corporations here, the one at the top being the 2011 Scottsdale Acquisition Group LLC, the one Steve Hirsch invested in. In this instance, Jenna borrowed $500M for an ownership share in this entity from another of the investors. The trouble is, the lender seems to have demanded collateral, which John provided from real estate that Jenna did not have title to. There will have to be some type of offset here, either Jenna will have to provide substitute collateral, or Jay will have to assume the debt, I don’t see that they would want to continue with the patchwork arrangement they have if they are continuing their MySpace war of words. I also wonder if John told Frank Koretsky that he has transferred the collateral in question out of his own name, which is de facto fraudulent conveyance.

3. The Real Estate: This part gets confusing, but it seems that the swindle happens here, too. Jenna and John began acquiring real estate, as joint tenants, as far back as 2000, spending $528M to buy into the McDowell Mountain subdivision of North Snottsdale–$103M down, the remainder mortgaged to Fifth Third Bank. The joint tenants make no mention of the source of the funds for this purchase. Jenna purchases a condo on Camelback Road in Scottsdale for rental purposes, and appoints her CJ Treasurer Linda Johnson as an attorney-in-fact.

From thence, in 2003 Jenna and John purchase a house in Villa Antigua, Scottsdale, ostensibly for rental income as well, and appoint the CJ Treasurer a POA for the selfsame function. Whenever these properties are sold, one of them will have to ask the other to sign a deed quitting claim to their interest in these properties, which have appreciated significantly in value. Given the current snipe fight, I doubt that would happen.

Now things get strange. In April 2003, the McDowell Mountain house is put up for sale by the joint owners, who are to be wed in two short months. The sale nets about $35M for John and Jenna as joint tenants. The next residence of the family is in Paradise Valley. John purchases, as a single man (5 months before his marriage), a $1.9MM house from a sibling, mortgages the property for $1.33MM to Merril Lynch, and moves in. Never mind that the property now merely assesses at $1.6MM. But this was the house in which Jenna and John established residence for some time. Don’t mind the fact that he transferred ownership into the “Horeseshoe Trust,” not really a trust, but rather a Colorado LLC whose ownership is unknown at this time. Now it’s all a moot point, as the property was sold on August 24, 2005 for $2.3MM, netting John a profit of, well you figure it out. All while he was married, all while he never asked Jenna to sign a quitclaim deed, or offered to allow her to participate in his real estate prowess.

The craziest of all is the last residential property, in the nouveau riche Hidden Valley section of Paradise Valley off 52nd St. In April 2005, John, as a married individual, acquired a chunk of land on a cul-de-sac for $4.5MM. This was accomplished via a $970M down payment plus about $3.5MM of first and second mortgage debt from a lender. As part of the deal, John got Jenna to sign a disclaimer of her community property rights to this real estate, functionally meaning she was renting her own homestead. John predicated this purchase on the belief that the proceeds for the down payment came from proceeds that were solely his. I don’t understand where these proceeds could have come from, unless family gave them to him in trust. John seems hard pressed for money in some of the years immediately proceeding this: in 2000 he was levied for failure to pay HOA dues; in 2003

The IRS placed $17,566 federal tax lien on John for failure to pay income taxes for FY1999. In 1997, John’s relatives mortgaged other real estate they owned to post a $700M bond for him in a criminal drug racketeering and money laundering complaint, filed several years earlier. Not to mention that he and his future wife had been investing in real estate as joint tenants for the previous five years, using their joint incomes to qualify for financing. Anyhow, less than a month after the purchase of this property, John transferred ownership of it into another Colorado LLC, without ever paying off the mortgages in his own name, an act of default under the various deeds of trust. This transfer has the effect of removing the property’s value from the marital estate, but since the corresponding $3.5MM in debt was for the purchase of the couple’s homestead, it still looms out there as something that a divorce court must contend with–John never acknowledged that the debt for this real estate was also “sole and separate.”

There also appear to be side issues of personal property, which John is withholding. That’s a bush-league technique to piss off your future ex. John rode the coattails of his soon-to-be-ex’s profitability, but when critical dates surrounding ownership of significant assets came around, such as his wedding and divorce dates, he scrambled to arrange assets so as to avoid the community property laws which dictate marital ownership rights in both Arizona and California. There are a lot of legal issues that I don’t want to get into (nor have the expertise for). Jenna has a good divorce attorney, I hope he earns his retainer, because I’m not a fan of the suitcase pimp.

At this point, I’ve lost count on how many millions John has swindled from Jenna, get your own calculator and do the math.