A former investor in “The Chosen,” a popular streaming series about the life of Jesus, has filed a class-action lawsuit saying he and more than 16,000 other shareholders were cashed out of the company without fair compensation.
Christopher Garabedian, a former biopharma executive who invested $300,000 in a predecessor of the show’s production company 5&2 Studios in 2019, says the company forced out minority stockholders who had crowdfunded the series through a reverse stock split.
The lawsuit, filed in the Delaware Court of Chancery, states that 5&2 understated future earnings while taking the company private.
It says financial projections during an earlier sale attempt implied a value of about $150 million, while the company was later valued at about $52.9 million when it bought out minority shareholders.
Mr. Garabedian, the show’s largest single crowdfunding investor and a co-executive producer of the series’ first season, said in the complaint that he held 150,000 shares and received about $560,250 after his $300,000 investment.
Dallas Jenkins, executive chairman and co-founder of 5&2, denied the allegations, stating the company has been transparent and accountable.
The complaint also states the vote over the stock split was held during Holy Week, when nearly 80% of minority shareholders did not vote, and that the company borrowed money earmarked for the show’s final season to finance the buyout.
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