January 23, 2012 6:24am PT by Eriq Gardner
Big Law Firm Sues Over Film Financing Finder's Fees
The law firm of Akin, Gump is suing a film executive whom is claimed to owe at least $2 million as a finder's fee for helping line up hundreds of millions of dollars in studio loans as well as distribution for the film, Father of Invention, starring Kevin Spacey.
The defendant is Mark Manuel, who allegedly had some bright ideas how Hollywood could take advantage of immigration laws for funding. According to a lawsuit filed in Los Angeles Superior Court on Wednesday:
"In early 2008, Manuel sought to arrange $100 million plus loans to major film and television studios pursuant to complex federal statutory regime by which foreign immigrants seeking EB-5 resident visas in the United States fund job-creating loans."
No further details about how the arrangement worked, but that's how Manuel is said to have met film financing lawyer John Burke at Akin, Gump. (Burke has been featured several times on our annual "Power Lawyers" list.)
Burke helped Manuel out on this front, arranging loan(s) for Warner Bros. totaling $150 million and a loan for Sony for $100 million. For the work, Burke's law firm was promised a compensation package that is fairly unusual in the legal world. The firm was to recover a finder's fee of 25 basis points (one-quarter of a percent) of the gross amount of the loan.
In 2009, Burke worked on a new project, according to the complaint. He needed to find a distributor for Father of Invention, and Manuel allegedly induced him to do so by promising a finder's fee of 50% of Manuel's compensation of $300,000 as executive producer of the film.
Akin, Gump now says the work was completed but charges Manuel with not paying the various finders fees.The firm also says that Manuel is now contending that he's entitled to unilaterally reduce Akin Gump's finders fee on the Warner Bros loans, based on his negotiating a reduction in his own fees with the studio. The law firm is alleging breach of agreements on the part of Manuel and is seeking compensatory and punitive damages.
"My legal team will respond appropriately," says Manuel in response. "Personally, I can generally say that (the lawsuit) is filled with gross inaccuracies and mischaracterizations, such as the singular heroics of their lawyer and everyone’s real role in all of this. I have been involved in creating complex financial structures in media and entertainment well before any association referenced in the complaint."