Cashing out the 16,000
Culture & Arts
Post Date:
July 10, 2026
Cashing out the 16,000
Early investors in The Chosen sue the production company for the fair value of their shares after a squeeze-out
"The Chosen" director Dallas Jenkins and actor Jonathan Roumie 5&2 Studios
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Several crowdfunding investors in The Chosen have sued the show’s production company 5&2 Studios, arguing they were unfairly forced out when the company performed a reverse split to consolidate shares.
As part of a privatization effort the squeeze-out happened before the premier of the series’ sixth season and before the production company embarks on several new projects. The now discontinued shareholders argue that they did not receive a fair value for their original investment.
In 2018, a small group of investors including series director Dallas Jenkins founded 5&2 Studios, a Delaware company headquartered in Texas. 5&2 produced The Chosen in partnership with Angel Studios until the collaboration ended in a legal dispute. 5&2 now exclusively produces the series. The June lawsuit alleges that 5&2’s original investors and founders maneuvered the reverse split decision.
The reverse split was part of 5&2’s privatization move to “relieve itself of the administrative burdens associated with its status as an SEC-reporting company,” per the lawsuit. 5&2 estimated that being an SEC reporting company cost about $3.7 million yearly. The company’s name refers to one of Jesus’ most well-known miracles, but “the take-private turned the Feeding of the Five Thousand on its head,” the lawsuit reads. “ The [original investors] fed only themselves.”
The privatization of 5&2 was a two-step process. In the first phase, 5&2 sold outstanding equity to a third party. In phase two, 5&2 bought back minority shares through a reverse split. The studio had sold Series B common stock to crowdfunding investors to raise capital in 2019. In the reverse split, 5&2 cashed out those stockholders for $3.75 per share, “a small fraction of the company’s value based on its strong financial performance in 2025 … and the upcoming final two seasons of The Chosen which promised to deliver the financial pinnacle of The Chosen’s run,” according to the lawsuit. All 16,000 shareholders who owned less than 173,500 shares were eliminated.
Christopher Garabedian, a biotech investor, held 150,000 Series B shares. Garabedian, the lead plaintiff, originally invested $300,000 in 5&2, making him the largest common stock holder. Before being cashed out, Garabedian offered to buy additional stock at a premium to remain a shareholder but was allegedly ignored. WORLD reached out to Garabedian’s attorney, who declined to speak on the record about the lawsuit.
The lawsuit also accused the production company of engineering the reverse split in part through “donations made by The Chosen’s loyal audience.” According to the complaint, a nonprofit which funds the production and owns the intellectual property of The Chosen series called the Come and See Foundation loaned 5&2 $24.7 million to pay Series B stockholders cash in the reverse split.
The stockholders had an opportunity to vote on the reverse split at the company’s annual meeting in March. But the lawsuit alleges the vote was announced too quickly for shareholders to cast a “fully informed vote.” Additionally, the vote was held the day after Palm Sunday. The lawsuit alleges that since many of the shareholders were presumably occupied with Holy Week activities, roughly 80% of the Series B stockholders did not vote on the reverse split.
The plaintiffs argue the reverse split, while not necessarily unlawful, violates Delaware corporate law, which requires stockholders to receive fair value for their shares. The lawsuit requests that plaintiffs be awarded the difference between what they were paid and the fair value of their shares as well as “damages … in an amount to be determined at the trial.”
WORLD reached out to 5&2 Studios for comment, and the company provided a written statement. “We’ve been transparent and accountable from the moment we formed our company and have gone above and beyond to follow all legal and financial requirements,” Dallas Jenkins wrote. “Any suggestion of impropriety is categorically false, and the full record thoroughly addresses every concern. We’re eager for the court’s review to affirm that.” 5&2 is scheduled to file a motion to dismiss and provide their opening brief by the end of August.
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Bekah is a reviewer, reporter, and editorial assistant at WORLD. She is a commissioned Colson Fellow and a graduate of World Journalism Institute and Anderson University.