11:48am PT by Ashley Cullins
'Knights of Badassdom' Producer Sued for Fraud
Three investors claim IndieVest promised them a "managed-risk approach" but actually defrauded them out of more than a million dollars, according to a complaint filed Friday in Los Angeles County Superior Court.
Jeffery Carrier, Teri Gregory and Neil Rowe are suing the company and its principal Wade Bradley for fraud, negligent misrepresentation and breach of contract, among other claims. (Read the full lawsuit here.)
The investors say Bradley approached them in 2009, selling IndieVest as a way for high net-worth individuals to finance his films. The men each invested hundreds of thousands of dollars in the form of convertible and non-convertible loans.
They claim Bradley assured them, and other investors, that investor funds would not be released from escrow until a certain minimum amount had been raised and their money would be returned to if that threshold was not met.
"IndieVest assured investors that even in the event of a total box office failure investors would receive a return of 70% of their principal by distributing back to investors the unspent marketing and advertising dollars," states the complaint filed by attorney Paul Salvaty on behalf of the investors.
In mid-2012, the investors claim, they executed a security agreement with Bradley to assure their loans would be repaid ahead of other investors. A few months later, they executed a letter of understanding that the loan would be repaid from the sale and theatrical release of Knights of Badassdom.
Despite starring Game of Thrones fan favorite Peter Dinklage, Knights of Badassdom was a disappointment at the box office — bringing in a meager $124,000 nationwide.
To date, the investors claim most of the initial loan balances remain outstanding. Bradley, they say, "offered a litany of excuses" for why he needed more time and in 2011 promised they would be repaid from foreign sales and tax rebates. "Most recently, Bradley promised Plaintiffs that their loans would be repaid from fund to be recovered from his defamation lawsuit in Los Angeles Superior Court," Salvaty writes.
That defamation lawsuit, and a second similar one, made public information that the investors found to be proof that Bradley had engaged in a pattern of wrongful, unlawful and fraudulent conduct.
The investors point to a FINRA investigation that led to conclusions against Bradley in 2013, which he concealed from them, that determined he willfully violated federal securities laws. IndieVest's website currently spotlights a press release saying a 2015 FINRA panel ruled in his favor. The investors claim that public statement is false.
In July 2015, the investors claim Bradley told them he had begun "winding down" IndieVest. Its successor Media Society produced Big Stone Gap, which had a domestic gross of more than $1 million, but the investors haven't received a dime from it.
"Bradley claims that IndieVest has 'accumulated too much debt to continue,' and that neither he nor IndieVest has the ability to honor his promises or to repay Plaintiffs the amounts that are due," Salvaty writes. "Moreover, Bradley falsely claims that his new venture, Media Society, which is merely a continuation of his old venture, IndieVest, has no connection to IndieVest, and, therefore, is not responsible to Plaintiffs for the amounts they are owed."
In a statement to The Hollywood Reporter, Bradley says: “The allegations regarding IndieVest are old news and were previously arbitrated by a three-judge FINRA consumer panel in 2015, which denied all of the claims in their entirety. We are confident this litigation will be dismissed and will not have any impact on Media Society. We are proud of what we are doing with Media Society and we are excited about our future.”
July 15, 2:25 p.m.: Updated with a statement from Bradley.