Weying Galaxy alleges it got taken for a ride in a deal for new movies in the Vin Diesel-starring xXx film franchise. The company has filed suit in Los Angeles Superior Court looking for punitive damages and the ability to take control of a joint venture that now owns derivative rights.
According to the complaint, Weying had the opportunity in 2017 to buy from Revolution Studios the rights to new films in the action franchise that had generated the original 2002 movie plus xXx: State of the Union and xXx: Return of Xander Cage. The counterparty was The H Collective (THC), which had represented that it had an option agreement with Revolution to acquire such rights.
Weying, represented by attorneys at Sheppard, Mullin, says it entered into a joint venture agreement with THC. Both sides agreed to put up a capital contribution for Xtreme Picture to work on a fourth xXx film. Ultimately, Weying says it contributed $6,155,000. Meanwhile, THC allegedly put up $2,045,000, less than half of what it promised.
“Then, in or about late 2018, Weying made a shocking discovery,” states the complaint. “Specifically, after Weying was induced to enter into the 2017 JV Agreement and 2018 Amendment and contribute $6,155,000 towards the purchase of what it was led to believe was 100 percent of the xXx Derivative Rights, Weying discovered that, contrary to Defendants’ representations, THC did not, in fact, acquire 100 percent of the xXx Derivative Rights and, indeed, never had the ability to do so.”
THC did have the ability to obtain a 50 percent share in xXx, continues the complaint, and further discussions and dealmaking commenced. But there was allegedly another problem. Weying says that unbeknownst to them, Diesel had the right to approve any transfer of the 50 percent, and such approval hadn’t yet been obtained.
“In fact, it was not until April 2020 – two years after Weying paid over $6 million for its share of the xXx Derivative Rights – that THC finally obtained the necessary consent of the Diesel Entity approving the transfer of the xXx Derivative Rights to Xtreme,” continues the complaint. “Moreover, in order to obtain the Diesel Entity’s consent after the fact, Weying was forced to agree to give the Diesel Entity additional controls and approvals over the xXx Derivative Rights, which have further devalued the xXx Derivative Rights and the parties’ joint venture and contributed to Weying’s and Xtreme’s damages.”
What followed was agreements for “true-up payments,” some made, others allegedly not.
Weying also says that THC and stakeholders Kenneth and Jianhui Huang have “engaged in numerous unauthorized investment transactions” around xXx 4 whereby they have “received and converted funds of over forty-million dollars that rightfully belong to Xtreme and are needed for Xtreme to carry out its business.”
Here’s the entire complaint with causes of action of fraud, breach of fiduciary duty, conversion, and breach of contract.
Reached for comment, the defendant gives up this statement: “As The H Collective and its affiliated companies has neither been served with or notified of any legal action, we can’t comment any further. However, we will defend ourself vigorously against any lawsuit filed by Weying Galaxy, Inc. and strongly deny these allegations.”
