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Month: March, 2012
‘Scare Tactics’ Producer Sues to End Distribution Deal
Category: News | Tuesday, March 20th, 2012 | Comments Off on ‘Scare Tactics’ Producer Sues to End Distribution Deal
WMTI Productions, producers of the Syfy reality show Scare Tactics, has filed both arbitration claims and a separate lawsuit against Rive Gauche Television, which is responsible for licensing and exploiting the show worldwide.
The show, which has been hosted in different seasons by Shannen Doherty, Stephen Baldwin and Tracy Morgan, and features individuals being pranked on hidden cameras by horror movie-style set-ups, is now the subject of a dispute over an alleged concealment of income, deduction of foreign taxes and whether the show has been properly exploited around the world. The plaintiffs are seeking damages for breaches of contract and also looking for a declaration that a licensing agreement between the parties is now terminated.
The TV series has been running since 2002. That year, WMTI entered into a licensing agreement with Rive Gauche to distribute the show in non-U.S. markets. The deal was renewed in 2006, and then again in 2008 and 2010.
As part of the first deal, Rive Gauche got 20 percent of “gross receipts” and was permitted to recoup expenses in addition to its distribution fee, up to 3.5 percent of receipts, according to the suit. In 2006, the Rive Gauche’s commission for distributing the series around the world was bumped up to 30 percent.
But WMTI says it discovered in late 2009 that Rive Gauche was taking fees based on a pre-tax estimate of the value of distributing Scare Tactics.
“Though the 2006 Agreement does not expressly define ‘gross receipts,’ under no reasonable interpretation of the term ‘gross receipts’ could Defendants expect to add the estimated value of taxes on the income generated by the distribution of Scare Tactics to the actual receipts therefrom, in order to assess its fees,” says a complaint filed in LA Superior Court on Friday.
The prospect of its distributor recouping foreign taxes has compelled WMTI to file the lawsuit. Additionally, the production company says that the defendant has failed to submit to an accounting to flesh out allegedly concealed funds and wants a judge to declare that the distribution agreement terminates automatically on March 20, 2012. That’s today.
The lawsuit was filed in state court because Rive Gauche has allegedly refused to permit arbitration of the 2006 Agreement.
Last month, WMTI also submitted claims against Rive Gauche with the American Arbitration Association that sought to punish the defendant for allegedly breaching its contract by failing to provide accountings, failing to inform WMTI of every deal entered, failing to pay all money owed, and failing to use its best efforts to exploit Scare Tactics in the licensed territories.
The production company, represented by Devin McRae at Early Sullivan Wright, is demanding the end to its distribution agreements and a return of all 84 episodes of the series in various versions.
Rive Gauch CFO Jay Behling has given us a statement in response:
“We don’t normally comment about legal matters, however these claims are without merit and will be proven as such. As our company prepares for its 20th anniversary, we are proud of our long commitment to integrity and best practices across all levels of our business associations and partnerships. We therefore do not take these accusations lightly. They conducted an audit in 2009 and no issues resulted from it. Without any basis for their claims, it appears they are trying to use Scare Tactics to make their case.”
Source: Eriq Gardner, Hollywood Reporter, Esq.
Eric Early Again Named to Southern California Super Lawyers
Category: News | Thursday, March 8th, 2012 | Comments Off on Eric Early Again Named to Southern California Super Lawyers
For the eighth year in a row, Eric Early has been selected as a 2012 Southern California Super Lawyer. He was also named in the 2012 Super Lawyers Business Edition.
Super Lawyers selects attorneys using a rigorous, multiphase rating process. Peer nominations and evaluations are combined with third party research. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement. Selections are made on an annual, state-by-state basis. The final published list represents no more than 5 percent of the lawyers in the state.
Source: Super Lawyers
Fighting Fraud with Due Diligence
Category: News | Thursday, March 1st, 2012 | Comments Off on Fighting Fraud with Due Diligence
Criminals will always find ways to take advantage of unsuspecting victims, but crime itself is evolving constantly. In today’s economic climate, more criminals are hatching intricate escrow- fraud schemes to bilk innocent people out of equity and other finances. As such, mortgage professionals need to be diligent about protecting themselves and their clients. Although crime can come in different forms and approaches, it’s a good idea for mortgage professionals to familiarize themselves with a few of the common ways that criminals direct their efforts at the housing industry. An example Criminal threats can come from a variety of places, both inside and outside the mortgage industry. Let’s say, for instance, that a real estate agent, escrow officer and shortsale negotiator collude with each other to scam a pair of distressed homeowners. They might begin by simply approaching the homeowners about short-selling their property. The scammer would then have the real estate agent get the listing, advertise the property as a short sale and then even contact a lender to start the shortsale process. From there, consider the following sequence of events:
•• The property is listed, and innocent buyers bid on the property.
•• The unsuspecting sellers are told that their buyer is a limited liability company (LLC), but in fact it’s a shell corporation created by the fraudsters themselves.
•• Short-sale approval letters are forged in favor of the LLC, using a template from a prior approval obtained from the bank and then forwarded to the sellers to induce them to execute a grant deed in favor of the LLC.
•• The buyers are told that the short sale has been approved, so they transfer the purchasing money into escrow.
•• The escrow company, which is also involved in the scam, fails to verify the veracity of the short-sale agreement with the lender, as lender-underwriting requirements could jeopardize the scheme.
•• The conspiring escrow officer then transfers the money to the scam’s coconspirators and provides false HUD-1s showing that the funds were used to pay off the lender.
•• Deeds are then created by the shell LLC and transferred to the buyers.
•• The sellers, meanwhile, assume that their loans have been paid off and thus stop making payments, causing the lender to begin foreclosure proceedings. It’s only now when the innocent buyers — and any innocent mortgage professionals involved — first learn that they have been defrauded.
Be diligent
This is just one example of the many real estate scams that floated in the market in recent years. It’s become critical for borrowers, brokers and lenders alike to conduct proper due diligence and ensure the safety of a transaction. The sophistication of scams has increased with technology. In addition, cash-strapped homeowners have become more desperate to sell. That is why it can be helpful to use attorneys that are familiar with real estate schemes to prevent fraud before it occurs or, alternately, to unwind a scam and press charges against wrongdoers after it occurs. Regardless, keeping yourself educated while also undertaking proper due diligence can help your clients’ transactions move more smoothly and, in certain cases, can even help you avoid being liable for a breach of fiduciary duty.
By: Eric P. Early and Scott E. Gizer
Source: Scotsman Guide