Hollywood Docket: Former NBA Player Sues Business Manager For Facilitating Embezzlement

Plus Warner Bros.' dismissal from a film scoring lawsuit and a new hire in Century City.
Rocky Widner/NBAE via Getty Images
Gilbert Arenas

A former NBA player has sued an entertainment business management firm for allegedly allowing a multimillion-dollar theft of his earnings. He wants $40 million.

Gilbert Arenas filed the complaint Friday against Boulevard Management and Lester Knispel, who has handled the finances of clients including Kim Kardashian and Shaquille O'Neal, and Andrew Surkin, who the complaint states is an employee of the firm.

The former Orlando Magic player claims he contracted Boulevard's work from 2006 to 2014 for $2.25 million. He "believed and intended that Knispel would use a system of checks and balances to supervise and monitor an established top tier team of advisors, bookkeepers and managers" to control his earnings, he says.

Surkin became the point person for his accounts, says Arenas. "Knispel was derelict in his duty to properly supervise Surkin," he continues. 

The core of the complaint is Arenas' former assistant John White, who in September was convicted of stealing $2.1 million from Arenas. Boulevard should have monitored White's transfers of funds from an account for Arenas' NBA salary to a separate account White could access, says Arenas.

Arenas was the only person who could approve transfers from the accounts, he says. When White transferred millions of dollars from Arenas' earnings account to the personal spending account, Boulevard should have cleared the transfer with Arenas, he says.

And when Boulevard stopped receiving bank statements for the personal spending account and learned the statements were going to White, the firm should have obtained the statements from White but didn't, continues the complaint.

According to Arenas, Surkin said during White's trial he had not obtained Arenas' approval for transfers because "[t]hat wasn't what I was told to do." Boulevard meanwhile hired an attorney, Dennis Roach, to investigate for Arenas, but Roach (who is not a defendant) hid Boulevard’s alleged misconduct because Boulevard hired him and he is a friend of Knispel's, says Arenas.

Outside the theft, Arenas says Boulevard repeatedly paid his bills late and provided him no financial counsel. “As the result of Defendants' failure to provide any meaningful advice, monitoring, or management of Arenas' investment decisions, Arenas' investment strategy was anemic, at best," states the complaint.

Represented by David M. Bass, Arenas claims breach of contract, breach of fiduciary duty, unjust enrichment, negligence and constructive fraud.

Read the complaint.

The Hollywood Reporter has requested comment from Boulevard.

In other entertainment law news…

>> Warner Bros. no longer will fight the American Federation of Musicians in a lawsuit over film scores recorded throughout the world. The litigious guild sued Warner Bros., MGM and Paramount in April (and later added Columbia) claiming scores for movies including InterstellarJourney 2: The Mysterious IslandRobocop and Carrie violate a collective bargaining agreement that requires scores for films produced in North America be recorded in North America. In August, Warner Bros. and the AFM dismissed the claim concerning Interstellar, according to an AFM rep. They now have resolved their dispute and filed a stipulation to dismiss Warner Bros. on Nov. 9.

>> Amid lawsuits over discrimination and YouTube piracy, the New York Times on Nov. 8 reported Al Jazeera America general counsel David Harleston is not a licensed attorney in New York State, where the network is headquartered, or any other jurisdiction. Al Jazeera confirms to The Hollywood Reporter the network has suspended Harleston and hired the law firm Skadden Arps to conduct an investigation. "My number one priority has been to ensure that AJAM is run consistent with the highest professional and business standards," said Al Jazeera America CDO Al Anstey in a statement. "I take very seriously any potential issue that could jeopardize the reputation and integrity of AJAM." A representative for Al Jazeera told THR Harleston would not provide comment.

>> Sidley Austin continues to develop its young media and entertainment practice with the hire of Richard Petretti, who will be a partner in the Century City office the firm opened in June. Petretti, who joins the firm from Morgan Lewis, specializes in entertainment industry finance deals (his previous work includes counseling J.P. Morgan on credit facilities for Lionsgate and MGM). He joins Matthew Thompson, who heads the media and entertainment practice, and new hires Jack Yeh, who will handle matters in and outside entertainment in the firm's complex commercial litigation practice, and Chad Hummel, who leads Sidley Austin's national trial program from Century City.