‘Hottest Girl in America’ Settles With Girls Gone Wild

Lawyers who are settling old legal disputes involving Girls Gone Wild have reached a deal with Chelsea Heath—the company’s Hottest Girl in America 2010—over thousands of dollars in prize money that she was never paid.

Ms. Heath, 25, a Louisiana native, was picked from thousands of contestants with help from fans who vote, and she later appeared on the Girls Gone Wild magazine’s cover, according to a press release about the contest. (She even got a shout-out from Mark Cuban, whose later-renamed HDNet broadcast the search: “Congratulations to Chelsea for being named The Hottest Girl in America.”)

Ms. Heath won $5,000 and was supposed to get $1,000 for the next 12 months, said her lawyers in a complaint that was filed to the U.S. Bankruptcy Court in Los Angeles. But after the company made several payments, Girls Gone Wild founder Joe Francis abruptly terminated her employment—“Your [sic] fired!” he wrote in two separate emails—in October. She was owed money at the time she was fired, violating the state’s labor laws, her lawyers argued in court papers.

Under the settlement, Ms. Heath, who is an actress working on an independent horror film, is expected to get paid $12,500. Ms. Heath will also get the power to push for more money when it becomes clear how much remains from the $1.8 million sale of the Girls Gone Wild brand earlier this year.

Lawyers who represented Girls Gone Wild asked U.S. Bankruptcy Judge Sandra Klein to approve the negotiated deal with Ms. Heath “to avoid costly litigation.” They pointed out that Ms. Heath’s lawyers originally pushed for a payment of $67,926.36.

Girls Gone Wild’s operations filed for Chapter 11 protection in February 2013 to block Las Vegas entertainment kingpin Steve Wynn and his resort company from taking the companies’ assets as repayment for Mr. Francis’s gambling debts, which had climbed beyond $30 million. Mr. Francis faces jail time for failing to turn over two luxury cars.

Write to Katy Stech at [email protected]. Follow her on Twitter at @KatyStech.