MONTREAL — The former owners of Pornhub parent company MindGeek are still involved in the firm despite selling it to a Canadian private equity fund in 2023 for US$400 million, according to allegations made in a U.S. court.

Ethical Capital Partners (ECP) “pretended to buy the company, announced it bought the company but didn’t really buy the company,” said lawyer Michael Bowe during a March 7 hearing at a U.S. district court in California. Bowe is representing Serena Fleites in a lawsuit against MindGeek and Visa. The suit claims in part that MindGeek knowingly disseminated sexually explicit material of her when she was 13 years old and that Visa profited from it.

Bowe also alleged that ECP was likely insolvent at the time of its offer to purchase MindGeek, the Montreal-founded, Luxembourg-based company behind Pornhub and dozens of other adult websites. As a result, Bowe alleged, ECP effectively agreed to pay MindGeek’s former owners in installments. This meant that ECP only paid MindGeek trio Feras Antoon, David Tassillo and Bernd Bergmair when it had sufficient funds to do so, he claimed.

Bowe made the claims about the sale of MindGeek and ECP’s solvency based on a complaint filed during the trial, to which Bowe referred at the March 7 proceeding.

MindGeek lawyer LisaMarie Collins confirmed the US$400-million sale price but denied Bowe’s allegation regarding the nature of the transaction, saying in court that payments have been paid to the former MindGeek owners. ECP “owns 100 per cent” of MindGeek’s shares, Sarah Bain, the firm’s vice-president told The Logic. “We respect the integrity of the court proceedings and look forward to the facts being fully and fairly aired in that forum,” she added.

Founded in 2021, ECP is a British Virgin Islands-based private equity firm with an office in Ottawa. Though ECP executives pledged to bring transparency to MindGeek, the firm has never revealed its investors or the price it paid for the acquisition. Solomon Friedman, a partner at ECP, has denied the three owners have any continued stake in MindGeek, which rebranded as Aylo in 2023.

Collins’s confirmation marks the first time MindGeek’s sale price has been publicly disclosed. The US$400 million is considerably less than the US$525 million that Antoon, Tassillo and Bergmair were offered in 2021. As The Logic reported at the time, the trio rebuffed the offer from Ottawa-based Bruinen Investments. A number of Bruinen executives are now at ECP—including Friedman, Bain and Fady Mansour, ECP’s majority owner.

Bergmair, the reclusive MindGeek owner whose identity was revealed in 2020, gave Tassillo and Antoon 31 per cent of MindGeek and $57 million in dividends to run the company, Bowe alleged. Neither Antoon nor Tassillo responded to The Logic’s request for comment.

Fleites, along with 33 unnamed plaintiffs, sued MindGeek and Visa in 2021 on 19 counts, including on conspiracy to “maintain, stream, reupload, monetize, and distribute” child sexual abuse material. 

The complaint alleged MindGeek was “built and sustained in material parts on child pornography, rape, and human trafficking.” According to the complaint, Pornhub repeatedly monetized sexually explicit content of Fleites when she was a minor and dragged its heels to remove it each time despite her numerous requests. MindGeek vice-president Corey Urman participated in an online campaign to discredit Fleites following the publication of the New York Times article, the complaint alleges.

The suit alleges that in providing payment processing services to MindGeek, Visa knowingly profited from illegal material on MindGeek-owned websites. Visa ceased providing services to Pornhub in December 2020, though a U.S. federal judge said the company was potentially liable for child sexual abuse material appearing on the site.

The claims in the lawsuit have not been proven in court.

During the March 7 hearing, federal court Judge Wesley Hsu said that multiple non-governmental organizations had informed Visa of the child sexual abuse material on MindGeek-owned sites. Visa lawyer Andrew Tulumello said this wasn’t sufficient to warrant a conspiracy charge against the company.

The two sides are scheduled to meet next in April, with Hsu requiring that defendants must narrow the requests they’ve made to seal documents being filed as part of the case. “I do think that there’s a public interest in the case,” Hsu said. “So I am going to respect that First Amendment right.”