Former agent's allegations of company funds paying for prostitutes 'pure fabrication,' Paradigm says

Paradigm Talent Agency fired back at sensational allegations from a former agent who accused the company's chief executive of outrageous behavior and of breaching her contract.

Former agent Debbee Klein sued Paradigm in Los Angeles County Superior Court last week, saying that she is owed more than $1.8 million for breach of contract, based on an oral agreement she had with Paradigm CEO Sam Gores over her compensation.

Klein also alleged in her lawsuit that Gores had instructed a former assistant to use company funds to hire prostitutes for him and others, and that the CEO had asked her to loan him money to make the company's finances look better for its bank.

But in a response to the complaint filed Thursday, the Beverly Hills agency disputed the claims as spurious.

"Klein’s headline seeking allegations of supposedly illegal conduct are pure fabrication designed to humiliate Gores and Paradigm and extort a lucrative settlement," Paradigm said in its response.

Paradigm included in its filing a declaration from a former executive assistant who said she was never instructed to use company money to pay for prostitutes and never had a conversation with Klein about the topic. That former employee's name was redacted in the the court document.

The company said Klein's claims about being asked to loan Gores money were "nonsense."

"Paradigm has always been fully transparent with its lenders," the agency said in its filing. "Moreover, the idea that $500,000 in Klein’s salary alone would have made any meaningful difference to Paradigm’s lenders is implausible to say the least."

Paradigm said that Klein's contract ended Dec. 31 and that it had been negotiating a new contract. But around March 12, Paradigm said it informed Klein that, because of the negative effects of the novel coronavirus outbreak on the entertainment industry, it could not enter into new employment agreements.

The outbreak has caused the cancellation or postponement of live events, concerts and Hollywood productions, leading many entertainment-related companies to implement salary cuts and layoffs.

On March 20, Paradigm laid off 250 workers, saying it hoped to hire many of them back no more than six months later. The company sent letters to former employees, saying it was citing a "force majeure" clause in their contracts that would suspend their compensation until they were brought back to Paradigm.

Paradigm's handling of the layoff sparked an outcry among former employees who accused the agency of misleading the public and clients about the severity of the cuts and depriving the laid-off workers of health insurance benefits. After former employees spoke up, Paradigm extended health insurance for laid-off workers from April to the end of June.

Klein was one of the employees who was let go.

"Instead of accepting that after years of continuous employment, Paradigm had to make tough, and hopefully temporary, employment decisions, Klein responded with an Uzi-like complaint only notable for its mendacity," Paradigm said in its court filing. "To say that Klein has stabbed her former mentor, boss, and friend of 23 years, Sam Gores, in the back is an understatement of epic proportions."

Paradigm has filed a demand against Klein with an arbitration service for breach of confidentiality and nondisparagement provisions in her 2015 employment agreement and is seeking several million dollars in damages.

Klein's attorney, Bryan Freedman, stood by the claims in the lawsuit, including the allegation of hiring prostitutes. He said there are other witnesses who had knowledge of the matter.

"Since disingenuously declaring a 'force majeure' and terminating/reducing hundreds of employees based on its 'financial inability' to perform on its contracts, suddenly, Paradigm has found millions of dollars to do everything possible to try and clean up Sam’s reputation," Freedman said in a statement.

In a statement, Paradigm said "it is not spending millions of dollars to clean up Sam’s reputation, which has only been tarnished by the falsehoods in Ms. Klein’s lawsuit." The company said it had been forced to involve its long time law firm and "public relations people" because of false statements and "lies" contained in a "frivolous lawsuit" covered by the media.

Earlier this week, Gores sent a note to workers letting them know Paradigm has a $1.1-million employee relief fund to help the people who were laid off in March. He also said that the company had retained "interim financing that will provide a bridge through this global crisis." The company declined to say where the financing is coming from.