2:38pm PT by Alex Ben Block
Bill Block Fires Back at "Absurd" QED Suit Over 'Fury,' 'Dirty Grandpa' Deals
Bill Block is firing back after he was sued by former associates at QED Holdings, now run by Sasha Shapiro and Anton Lessine. The duo charges Block with trademark infringement and unfair competition for using their company name on projects for his own benefit.
The suit filed in U.S. District Court, Central District of California, Western Division, on Wednesday, charges that "while Block was serving as QED's CEO, he was actively and surreptitiously working to steal QED's assets and leverage QED's opportunities for his own personal profit."
Marty Singer, an attorney for Block, calls the claims in the suit "absurd and without merit." Singer says that Shapiro and Lessine, who are from Russia, brought about all the problems when they ran out of money. The attorney also noted the funding is the subject of an investigation by the U.S. Justice Department and the FBI for money laundering and other matters.
Singer says that after Lessine's father, Mikhail Lesin, the former press minister of Russia, was forced out last December as head of Gazprom-Media, the largest TV company in Russia, the money available to his son to invest in movies was cut off. He says all of the company's problems can be traced to that event, which Singer says is now being investigated by the U.S. Justice Department and the FBI.
The investigations, which the U.S. Attorney and FBI have never confirmed, came after a U.S. Senator asked for an investigation into money laundering by Lessine's father.
In February, Lessine in a statement to The Hollywood Reporter said that his source of funds was not from Russia and that any money his family put into QED is not subject to the FBI probe.
"Everything they are now charging," says Singer, "is due to the fact that there is a government investigation into money illegally coming into the U.S."
"This suit is a smoke screen," says Singer, "for the company to justify the fact they have no money."
According to the suit, Media Content Capital in 2012 paid $25 million for 75 percent of QED, with Block and other partners retaining 25 percent.
Singer says that Shapiro and Lessine were fully aware that Block formed a new company last October, and that one of their own lawyers, Josh Grode, knew what was going on.
"In Oct. 2014," said Singer, "Josh Grode, attorney for both QED and Mr. Block, approved Mr. Block going to work at a new company (Merced Media) and was listed as Mr. Block's lawyer in the press release for that transaction. This is contrary to the allegations in QED's lawsuit."
Steven Marenberg, attorney for QED, told THR that "the assertion that this has something to do with Russian money laundering is so absurd and over the top that I wont dignify it with any further response."
According to Singer, QED will make a profit of over $15 million from the hit movie Fury, starring Brad Pitt, which Sony distributed.
Marenberg says that Fury is the only significant hit Block made since the company was sold and that it was his job to make hits, so of course the money should flow back to QED.
The suit also charges that Block acted unilaterally to take sole control of certain movie projects, including Birth of The Dragon (about the late Bruce Lee), after QED had spent at least $150,000 to develop it and paid for Block to travel to China to secure an investment in the picture.
Block then secured $10 million in financing for the Bruce Lee movie through a company he formed called QED Pictures, which the suit says is not part of QED Holdings. It charges he got a $1 million down payment and pledged as collateral rights he did not actually control. "Block has thus fraudulently pledged as collateral assets he does not own," says the suit, "thereby exposing QED to significant liability."
The suit also charges Block improperly took control of a movie project called Dirty Grandpa, and through another company he formed, DG Licensing LLC, along with "Grandpa Productions LLC" took control of the project and sold distribution rights to 28 international distributors. He also, says the suit, hired actors, including Robert DeNiro and Zac Efron, and began filming without any input from QED, which is on the hook for compensation guarantees on the project.
Singer says Block did QED a favor by securing financing for Dirty Grandpa from Union Bank on his own, and that QED is going to make as much as $1 million from the movie.
Marenberg says that the money from Union Bank was guaranteed by presales and will be paid back not by Block, but from revenue generated by the movie.
"I have all along been acting in the best interests of QED," Block said in a statement, "our filmmakers, our production partners and the employees of the company i founded. I'm confident that I will be completely vindicated in this litigation."
In February, Block was in negotiations to exit QED with Media Content Capital, a company run by Sasha Shapiro and Anton Lessine. Those negotiations later broke down and no final deal was ever consummated.
Singer charges that the separation agreement was actually finished but the "Russian principals of QED subsequently tried to renegotiate their deal with Mr. Block. When they cold not do so on terms to their satisfaction, this absurd lawsuit resulted."
According to Singer, QED filed for an arbitration separate from this lawsuit.
That arbitration is to seek repayment by Block of money that Marenberg says was improperly paid as expenses to Block which were actually personal.
According to the suit, Block was employed under the sale agreement with an annual salary of $650,000 (and options for more based on performance) and was paid $2,000 a month for club memberships, insurance as a director, health benefits and other perks. He was paid through Jan. 31, 2015 ,when he officially left QED.
In 2014, the suit says, it became clear that "despite Block's representations," there wasn't enough money to cover the "huge operating expenses" and other overhead costs. Block and QED discussed how to restructure the company but no agreement was ever reached.
In a statement issued through Marenberg, Shapiro and Lessine read: "Notwithstanding the recent change in management, we will continue to support promising new creative endeavors and to stand by our existing commitments in order to ensure that projects in the pipeline have the creative and financial support to come to fruition. Toward that end, we will fight for the viability and all legal rights of this company, whether protecting our brand identity or content ownership."
Singer says, "We feel very comfortable that we will prevail in this matter."