March 31, 2011 2:16pm PT by Eriq Gardner
Film Company Suing Thousands of Pirates Might Have A Big Problem (Exclusive)
Camelot Entertainment Group has hopped onto the mass-suing bandwagon by targeting 5,865 alleged downloaders of the B-movie revenge flick Nude Nuns with Big Guns. But the company might not even own the film.
Wired broke the story of how Camelot is hoping to turn its obscure outfit's movie into gold, suing thousands of anonymous pirates in hopes of gaining as much as $879,750,000 — more money than the U.S. box-office gross for Avatar. The company is imitating the legal tactics of film companies like Voltage Pictures and Nu Image, which have collectively sued more than 100,000 individuals over big pictures like The Hurt Locker and The Expendables to much smaller fare.
But what Wired didn't cover might be the most interesting part of the saga.
Last Friday, in Utah District Court, Camelot was sued by Incentive Capital for breach of contract and fraud for allegedly failing to repay a $650,000 loan to acquire the rights to a film library of 880 titles ("Liberation Library") that includes, yes, Nude Nuns with Big Guns.
Incentive says that it loaned Camelot the money pursuant to an April 27, 2010 agreement. Camelot "failed to meet their obligations under the Loan Documents just months after receiving funds from Incentive," says the complaint.
The lawsuit reveals that in February, Incentive began to take steps to foreclose on the collateral from the loan, including the rights over the film library. "No objection was made to the Foreclosure Sale, and as of [February 21], Incentive became the legal title holder to the Liberation Library," the complaint continues.
The lawsuit against 5,865 alleged pirates was filed by Camelot on March 7th, presenting the possibility that one of the largest copyright lawsuits in California history was made over a title outside the plaintiff's actual domain.
Did Camelot acquire the rights to these titles just to sue infringers? The loan purchase happened in April 27, a few weeks after THR, Esq first broke news about the U.S. Copyright Group's new legal tactic to sue thousands of John Does in the war against piracy.
Reached for comment, Camelot's lawyer, Scott Hervey said he was unaware of Incentive's lawsuit and would be looking into it. We'll update this post if we hear more.