Dominion filed a $1.3 billion defamation lawsuit against MyPillow and its CEO Mike Lindell in February.
The litigation has led to people joking about how Dominion will soon own the pillow company.
Legal experts told Insider there are 2 ways Dominion could wind up owning MyPillow if it wins in court.
Dominion Voting System’s spree of lawsuits fighting against 2020 election conspiracy theories have drawn wildly different reactions from the defendants.
Some have taken steps to address the allegations, like Fox News, which asked the court to dismiss the defamation lawsuit, parted ways with co-defendant Lou Dobbs, and has avoided giving a platform to conspiracy theorists like Sidney Powell in the past few months.
On the other end of the spectrum is MyPillow CEO Mike Lindell, who instantly went nuclear.
As soon as Dominion filed its lawsuit in February, Lindell declared he was “happy” to face the election technology company in court. He filed a counter-lawsuit, has refused to provide an answer to Dominion’s initial claims, and subsequently bankrolled and starred in three “docu-movies” and one “cyber symposium” advancing the conspiracy theory that Dominion manipulated election results.
As the meme goes, Dominion will soon own MyPillow, Lindell’s company.
Dominion is asking for $1.3 billion in damages, suing both MyPillow and Lindell personally. It alleges Lindell used his company’s resources in pursuit of defaming the election technology company, selling more pillows in the process.
“I’m the one that asked them to sue me,” Lindell told Insider on Wednesday, repeating false claims of election fraud. “I don’t care if it’s a scrillion, a billion, whatever. It’s all just a joke.”
Lindell said he was “not worried” about Dominion’s “frivolous” lawsuits. Dominion wanted to suppress his voice “by trying to bankrupt Mike Lindell,” he said, switching to third-person.
But if Dominion wins its defamation lawsuit against Lindell’s company, will it actually end up owning MyPillow?
Bankruptcy law experts say it’s possible. If MyPillow loses, Dominion will have two opportunities to add a pillow company to its portfolio: Seizing its assets or winning a bankruptcy auction.
Dominion could use a judgment to freeze MyPillow’s assets and seize them
Dominion has justified its $1.3 billion damages claim by arguing that Lindell’s conspiracy theories have made it lose out on future contracts and generated death threats against its employees.
A jury will ultimately decide how much to award in damages if the case goes to trial. If a jury agrees with Dominion’s assessments, the damages will almost certainly exceed MyPillow’s value and Lindell’s net worth.
As a privately held company, MyPillow’s doesn’t have a public valuation, and Lindell declined to comment on its value. The pillow mogul doesn’t appear on any billionaire lists.
Once the judge enters the jury’s judgment – and assuming MyPillow loses on appeal, or fails in arguing the damages down to a manageable sum – Dominion will have an opportunity to seize MyPillow’s assets.
Dominion could go to Minnesota, where MyPillow is based, and file what’s called a “writ of execution” to the local courts. From there, the local sheriffs or courts will be able to freeze assets like bank accounts and hand over Lindell’s MyPillow shares and the keys to his pillow warehouses.
“What you need to do is you need to go into all the states that MyPillow has assets. So they go into Minnesota where MyPillow is, and they file the judgment there,” Eric Snyder, a bankruptcy attorney at Wilk Auslander LLC, told Insider. “And then they go to the sheriff and say, ‘I want you to start seizing the assets of MyPillow – inventory, equipment, everything they own.”
Dominion would have the ability to seize assets until the value of the judgment is satisfied. It could auction off those assets itself, or it could keep them and have them valued, according to Edward Adams, a professor of corporate and bankruptcy law at the University of Minnesota law school.
Dominion’s defamation lawsuit is moving through federal court in Washington, DC, but a judgment will still be recognized in Lindell’s hometown in Minnesota. Minnesota state law regarding seizures only covers what assets can be seized, according to Adams.
Dominion might be able to take MyPillow’s office real estate, but they would have a tougher time getting Lindell’s house, or personal items like his honorary Liberty University diploma, Adams said.
Of course, Lindell can always decide to settle the lawsuit on his and his company’s behalf. But it’s hard to see that happening: Lindell has full control of the company, he told Insider. And he has refused to concede that Biden fairly won the 2020 election and Trump won’t be reinstated as president.
Dominion probably doesn’t want to settle either, Snyder said.
“It’s not in the best interest to settle. They’re trying to make a point,” Snyder told Insider. “If I’m Dominion, I don’t even want the money. It’s not what it’s about. It’s about the reputation.”
Lindell doesn’t want the company he spent decades building to be seized by a company that sued him, so he’ll probably take another route.
“MyPillow is not going to want any of that,” Snyder told Insider. “So MyPillow is going to probably file bankruptcy.”
Winning a bankruptcy auction would be harder for Dominion, but it would still have a shot
If MyPillow filed for bankruptcy, it would liquidate itself with court-supervised auctions to pay off creditors and debts.
In that scenario, Dominion wouldn’t likely recover all the damages a jury may award it. Companies going through bankruptcy have an obligation to pay “secured” creditors first, including lenders and employees who are owed wages.
Dominion wouldn’t be high up on the priority list when it comes to getting proceeds from a bankruptcy auction, because judgments are considered “unsecured” creditors.
“In a typical corporate bankruptcy, unsecured creditors get 10 cents on the dollar,” Adams told Insider. “It’s not a great place to be.”
Lindell told Insider that MyPillow doesn’t have any creditors or debts. He said he owns the majority of shares in the company and has given some employees shares as well.
But even if Dominion gets knocked down the priority list in a hypothetical bankruptcy auction’s proceeds, Dominion could try to acquire MyPillow’s assets as a bidder. And any judgment it may be awarded would be as good as money.
“They can place what’s called a credit bid, which basically means they bid not with money, but with what’s owed them,” Adams said. “It’s effectively money.”
With a massive judgment, Dominion would almost certainly be able to win any auction and own the pillow company.
“Maybe some competitor wants to buy MyPillow and they’re willing to pay a hundred million,” Adams said. “If their credit is $1.3 billion – I mean, they’re going to win.”
Does Dominion want to own a pillow company?
It’s an open question whether Dominion even wants to own MyPillow, since producing and selling pillows requires a different skillset than administering election technology.
It’s also impossible to predict how much in damages Dominion would win at trial. The “big money,” according to Clay Calvert, a press-freedom expert at the University of Florida, will be in the punitive damages, where a jury could impose massive numbers on Lindell.
“The punitive damages are beyond the compensatory damages, whether it’s general compensatory or special damages,” Calvert said. “They’re designed to punish and to deter conduct like this in the future.”
Dominion may also be competing against Smartmatic, a rival election technology company that has been the subject of the same conspiracy theories and filed its own defamation lawsuits. Smartmatic hasn’t sued Lindell, though.
For his part, Lindell has shown no interest in owning an election technology company.
In his interview with Insider, Lindell made the bold prediction that state attorneys general would file a lawsuit later this month that will result in the Supreme Court overturning the 2020 election results and getting rid of all voting machines in the United States.
“I want to take Dominion, the company, melt down the machines and use the metal for prison bars, and the plastic for the little trays they served breakfast on in prison, for all the Dominion people that were involved in this, and all the other criminals like Mark Zuckerberg, Jack Dorsey, the CCP, everyone that was part of the biggest crime in the history of the world,” he told Insider, referring to the Chinese Communist Party, which he baselessly claims was involved in hacking election results.
Asked if he was worried about Dominion’s lawsuit succeeding, Lindell said Insider was “wasting my time” and speculated Dominion’s executives would go to prison.
A representative for Dominion pointed Insider to its original lawsuit in response to questions about its litigation.
“He is well aware of the independent audits and paper ballot recounts conclusively disproving the Big Lie,” the lawsuit reads. “But Lindell – a talented salesman and former professional card counter – sells the lie to this day because the lie sells pillows.”
If a jury awarded Dominion $1.3 billion, it would almost certainly be the biggest-ever verdict in US history for a defamation case. It would be far beyond the $177 million Disney had to pay in the “pink slime” case, which is believed to be the biggest award in recent years and involved an NBC News story that misled viewers about a beef company’s products.
The beef company in that lawsuit hired Tom Clare, a famed defamation attorney, to represent them in the litigation, which ended in 2017.
Clare is now representing Dominion.
Read the original article on Business Insider