2:01pm PT by Ashley Cullins
BMG Sues Radar Pictures for Fraud Over Film Slate Claims
Radar Pictures overstated both the number and nature of film and television projects under its control in order to persuade BMG of the potential financial upside of entering into a joint venture, according to a federal complaint filed Monday in New York.
BMG is suing Radar, which is owned by Interscope Records co-founder and movie mogul Ted Field, for breach of contract, breach of fiduciary duty, fraud and conversion and is seeking compensatory and punitive damages.
"Defendants misrepresented themselves in order to induce BMG to enter into a joint venture with them, and, after doing so, reserved for themselves opportunities that belonged to the joint venture, and breached their fiduciary and other obligations to BMG," writes BMG's attorney Robert A. Jacobs. "Since then — and despite their many breaches — Defendants have refused to account for or return any of the monies they received from BMG."
“Radar absolutely denies the facts as alleged,” says Radar’s attorney Jon Freund. “They are ridiculous and we will vigorously defend. The claims have no support and are not based in fact.”
BMG claims under a 2011 joint venture agreement that defendants were to present to BMG "all opportunities available to Defendants to acquire ownership rights in various types of musical compositions and sound recordings in audiovisual works, including feature-length motion pictures and episodic television programs."
In the first three years, BMG claims, the venture agreement guaranteed a minimum release commitment of 20 qualifying movies and three qualifying TV series. BMG agreed to pay joint venture advances in excess of $1 million, $387,500 of which was paid when the initial agreement and an amended agreement were executed. As part of the deal, BMG would receive monthly reports of all joint venture activities.
In addition to not presenting any acquisition opportunities to BMG during the agreement period, the company also claims it was given during negotiations a list of projects Radar and Field were involved in that was misleading.
BMG says defendants claimed to have "at least eleven projects 'leaving various stages of development,' all of which were 'MAJOR studio releases that [would] have global, broad theatrical distribution and star top talent'; (ii) such projects included the feature films A Christmas Story 2; Frank; The Woman Next Door; Three Men and a Bride; Jumanji (remake); Magic Castle; Revenge of the Jocks; Gotti; Aurora; The Greys; and Spell; and (iii) Defendants had 'a current script library of approximately 140 titles so pitches are taking place daily,' and also had 'a number of reality and scripted television series that [were] in various closing modes.'"
Those statements boil down to nothing more than "knowingly or recklessly false promises," according to BMG, which claims it learned that those projects either weren't associated with defendants, never went into preproduction or were not scheduled for release during the term of their venture.
"In reality, Defendants had only a small number of film and television projects under their control, almost none of which had any chance of production and distribution during the life of the Agreement," Jacobs writes.