8:11am PT by Eriq Gardner
Investors in Robert De Niro Film Sue to Get Money Back (Exclusive)
A film financing company that put up nearly $6 million for the production of Stone, starring Robert DeNiro and Ed Norton,, is suing Nu Image and Millennium Films for allegedly duping them into losing their entire investment when the film sold for a less-than-expected sum to distributors and bombed at the box office in 2010.
According to a complaint filed by Mimran Schur Pictures in Los Angeles Superior Court on March 30, David Mimran and Jordan Schur were successful businessmen outside the film realm until they decided to start MSP and invest in filmmaking.
The MSP toppers aren't complete entertainment novices, though. Mimran, an investment banker, was the founder of Savage Records, an artist management company whose clients include David Bowie and Prince. Schur founded Flip Records, which helped launch the careers of Mary J. Blige, Snoop Dogg and Beck.
When Mimran and Schur decided to invest in independent films, they knew enough that foreign sales have traditionally been the life blood of the sector, but apparently not enough to realize how much foreign sales has dried up in recent years.
Together, the two invested $5.775 million in Stone and, according to the complaint, MSP was down the ladder in terms of priority for recouping its money. The first money back from the film's proceeds would go to repay more than $8 million in loan and interest from Comerica Bank, and then the next money would pay a 5% international sales agent commission to Nu Image and Millennium Film.
In other words, MSP wouldn't start seeing any money until after $8.58 million came in the coffers.
Mimran and Schur say they did the deal anyway based on a projection provided that estimated foreign sales would be somewhere between $10.3 million and $16.4 million. But now they are accusing the defendants of exaggerating these estimates to win their investment.
"The industry depends on the accuracy of international sales estimates, and producers generally trust international sales agents to provide reliable estimates at the time the budget of the film is developed and film financing is sought," says the complaint.
And at the 2010 Toronto Film Festival, Christian Mercuri, president of international sales for NIM, allegedly explained the estimate was impossible because the market in Asia had collapsed, adult dramas were suffering in the then-economic climate, De Niro no longer carried the same box office pull outside the U.S. he had in the past, and the script for Stone was bad.
MSP now is suing to get its $5.775 million investment back plus punitive damages.
Nu Image declined comment.