October 24, 2012 4:23pm PT by Paul Bond
Investors in Legal Confrontation Over '2016: Obama's America'
The filmmakers behind 2016: Obama’s America, the second most successful political documentary in history, are squabbling over profits and control of Obama’s America Foundation, the limited partnership formed by those who invested in the movie.
Douglas Sain -- who owns a 25 percent interest in the company, which is referred to as OAF in legal documents -- is accusing the film’s director and star Dinesh D’Souza of misusing funds associated with 2016 and is attempting to obtain more control over OAF going forward. Sain also says he has more than a 25 percent claim on OAF.
Sain, who produced 2016 along with executive producer Gerald Molen, the Oscar–winning producer of Schindler’s List, also claims D’Souza spent some of OAF’s money on his relationship with Denise Odie Johnson II. D’Souza recently filed for divorce from his wife and postponed his engagement to Johnson.
Sain last week filed for a temporary restraining order against D’Souza. Sain’s attorney, David King of the King Law Firm in San Diego, was unavailable for comment.
The film, a critical look at President Barack Obama, earned $33.5 million domestically in theaters and Lionsgate has released the movie on DVD.
In his response to the allegations leveled by Sain, D’Souza says Sain has been making poor decisions about how best to monetize 2016 and, in fact, he shouldn’t be the one in charge of making such decisions to begin with.
Sain’s company, Sain Communications, Inc., “was solely responsible for mismanaging relationships with vendors, delaying lucrative agreements with Lions Gate Films, unilaterally implementing a marketing plan over the objection of the majority members, and failing to get financing for a Spanish Language version of the DVD,” according to D’Souza.
According to documentation filed by D’Souza on Monday, he owns a 55 percent voting interest in OAF and 62.5 percent economic interest, while Sain’s company, SCI, owns a 25 percent voting and 25 percent economic interest. A third company, Veterans Gateway, Inc., owns a 20 percent voting interest and 12.5 percent economic interest.
“VGI and I, representing 75 percent of the membership interests in OAF, agree on what needs to be done to market and exploit the picture. SCI and Mr. Sain are blocking OAF from taking necessary actions,” according to D’Souza.
“A minority member of the production company is trying to take over the management control of the company so an arbitration was filed by Mr. D’Souza, who owns a majority interest in the company,” said D’Souza’s attorney, Kelly Crabb, of Sheppard Mullin Richter & Hampton.
“Mr. D’Souza doesn’t even have control over the money. He’s had to lend his own money to the company. This should have just been resolved by the members in arbitration, which they all agreed to, but one of the members wants to make trouble,” Crabb said.