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Sarah Johnson, an executive producer on the Oscar-winner Birdman and heiress to the multibillion-dollar Franklin Templeton fortune, has lost most of her legal claims tied to the blow-up of Worldview Entertainment.
In March 2015, she filed a $70 million lawsuit claiming that Worldview had misused her investments and lied to her about its financial state over several years. She also targeted former CEO Christopher Woodrow and the company’s co-founder Maria Cestone, who continue to fight with each other over the film financing company that made a splash on the entertainment scene before imploding in spectacular fashion.
In reaction to the lawsuit, Cestone argued that Johnson was aggrieved by the perception of bad investments, but that couldn’t support the claim that she was fraudulently induced into investing in excess of $25 million into various films.
New York Supreme Court judge Eileen Rakower agrees.
Rakower writes in the decision (see here) that the operating agreement for her subscription in the company “acknowledges the speculative nature of investing in the motion picture industry and the high risk of a total loss on an investment in a motion picture.”
Johnson asserted that she relied upon misrepresentations about the health and financial success of Worldview’s endeavors in continuing to invest in its new films, which included Child 44, Triple 9 and Rules Don’t Apply.
“Such claims are starkly contradicted by the very agreement she signed,” continues Rakower, adding that Johnson “acknowledged that the film had no prior history upon which to rely, that it was a speculative investment, that it was dependent upon the uncertainties of public acceptance, and that the film could be abandoned and not completed.”
Thus, the fraud claims go, and when it comes to some of her breach-of-contract claims, she fares no better.
For example, she claimed that Worldview had violated the express obligations of one contract by failing to use “ordinary care and reasonable diligence in carrying out the affairs of the Company,” by investing in Devil’s Knot, a 2014 picture by Atom Egoyan, that allegedly had no reasonable chance of returning her investment. The judge, though, notes that the agreement she signed barred liability for negligence on the part of Worldview or its management.
The judge also throws out civil conspiracy, fiduciary duty, conversion and unjust enrichment claims as well as dismisses all claims against Cestone, Woodrow, and Worldview lieutenant Molly Conners.
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