6:29pm PT by Ashley Cullins
Emmett/Furla Hit With $4.5M Fraud Lawsuit Over 'Inconceivable'
Emmett/Furla/Oasis Films is being sued by its Inconceivable co-producers for fraudulently inducing a $1 million investment, which it has yet to repay.
Jonathan Baker claims Randall Emmett told him if he agreed to co-finance and produce Inconceivable he'd return the favor by co-financing and producing a film of Baker's choosing.
Almost immediately after the funds were deposited, Baker claims, defendants paid themselves $650,000 more in producer fees than was agreed upon and failed to disclose the payment. Baker also claims defendants breached their deal by accepting additional financing from third parties and allowing those parties to be repaid first.
Baker Entertainment is suing Emmett/Furla/Oasis, Georgia Film Fund Twenty-Nine and Higrowth LLC and is seeking at least $4.5 million in damages.
"BFF [Baker Film Fund] has not been paid back one dollar of its equity investment in the First Picture or its financing fee, nor has BEG [Baker Entertainment Group] been paid for Baker's director services, and BEG also has not been paid its entire producer fee, and has been forced to bring this lawsuit in order to prevent EFO [Emmett/Furla/Oasis] and the other Defendants from depriving Plaintiffs from the money that is rightfully theirs," writes attorney Brian Wolf in the complaint filed Friday in Los Angeles County Superior Court.
The parties created a joint venture for the two projects, under which Baker would contribute $1 million in equity for the first film and collect a $125,000 directing fee, according to the complaint. An amendment to their term sheet later granted Baker 49 percent of the copyright in the film, and included producer fees of $425,000 for Baker Entertainment and $550,000 for Emmett/Furla.
"BFF and GFF [Georgia Film Fund] entered into a further agreement ... that provided, amongst other things, that BFF, in exchange for its $1 Million investment in the First Picture, would receive $1.3 Million from the first adjusted gross receipts of the First Picture and a financing fee to be paid out of the budget for the First Picture," writes Wolf. "The only monies that would be paid prior to BFF were (a) the Collection Account Management Agreement fees and expenses; (b) the actual sales fee; (c) residuals; (d) actual out of pocket distribution and sales costs incurred by the production company; and (e) the repayment of production loans limited only to banks and/or financial institutions."
Baker says these terms, combined with the agreement to fund and produce the second project, were key in his decision to make the $1 million investment in Inconceivable.
Martin Barab, attorney for Emmett/Furla, tells The Hollywood Reporter that Baker Entertainment has already been repaid half of its investment in the weeks since the film's June 30 release. He also says the suit is "bogus and frivolous."