10:08am PT by Eriq Gardner
Merchant Ivory Claims Ex-Head of French Office Misappropriated Funds
Merchant Ivory Productions, led by Howard's End director James Ivory, is wondering what happened to the $3.89 million that the company got for the sale of a Parisian apartment.
The company is now suing Gil Donaldson, former head of its French division, for misappropriating corporate funds.
In a lawsuit filed on Thursday in George federal court, Ivory says he decided in 2009 to sell an apartment on Rue Bonaparte as well as an office. The latter sold for $472,6000, which added to the proceeds of the apartment sale, and was to be used to pay off certain creditors.
Ivory says that after the debts were paid, there should have been a remaining balance of $650,980.
"Without providing any such accounting or bank statements, at one point Defendant told Ivory that the French Government took the balance of the Sales Proceeds," states the complaint. "Defendant did not produce any documentation to support this assertion."
In 2013, Donaldson is said to have left Merchant Ivory and ceased communications with Ivory, who then retained the services of a local lawyer who obtained access to the French division's bank account.
"The Statements revealed that Defendant misappropriated a substantial amount of MIP France's funds," continues the lawsuit.
From looking at canceled checks, Ivory claims that Donaldson wrote checks to himself, withdrew cash and issued wire transfers to his own bank account in Savannah, Georgia. The lawsuit also reports disbursed money transfers to "unknown individuals and unknown entities in the amounts of approximately $188,536.25 and $340,478.97, respectively."
A demand letter sent on October 15 is said to have gone nowhere, so Ivory is now suing for breach of fiduciary duty, misappropriation of corporate assets and negligence in management pursuant to French law. The producer/direct is seeking an accounting plus damages of at least $260,889 for each of the causes of action and at least $1 million for exemplary and punitive damages.
Donaldson couldn't be reached for comment.