Publicist Who Couldn't Keep Quiet Faces $300 Million Trial Over 'Rebecca' Scandal

A New York appeals court agrees that Broadway veteran Marc Thibodeau breached contract.

A planned Broadway musical adaptation of Rebecca, based on the 1938 Daphne du Maurier book, was grounded under bizarre circumstances, and now, the stage could be set for a trial between producers and Marc Thibodeau, the show's former publicist who on Thursday suffered a big loss in a New York appeals court. 

Rebecca was to be a $12 million production from Ben Sprecher and others before everything unraveled in 2012. As recently recounted on the Aug. 11 episode of CNBC's American Greed, the producers were relying upon a stockbroker named Mark Hotton to come up with cash to fund a shortfall in the show's budget. Hotton represented that he had overseas investors waiting in the wings and fabricated phony email addresses and conversations with them. He got money for commissions and to go on a safari trip, and as Rebecca came close to opening, Hotton told producers that one of his imaginary investors, "Paul Abrams," had died of malaria. The production was suspended, and after the truth came to light, Hotton pled guilty to wire fraud and was sentenced to nearly three years in prison. 

Thibodeau's own role in what happened isn't quite as bizarre, but it's still strange and the subject of an ongoing civil case where producers are seeking hundreds of millions of dollars in damages.

The publicist, a Broadway veteran who's worked on The Phantom of the Opera, Les Miserables and Miss Saigon, spoke to a New York Times reporter after the supposed death of the foreign investor, and after conducting his own research, Thibodeau began to suspect that Hotton's mysterious investor was fictitious. According to the court documents, he went to Sprecher about his suspicions and was told, "Don't go there about this stuff."

Notwithstanding this directive, Thibodeau sent anonymous emails to Laurence Runsdorf, a heavyweight in the pharmaceuticals industry who was a prospective investor in Rebecca. The first few emails drew attention to articles in local newspapers, but the fourth sent under the false name "Sarah Finkelstein," told Runsdorf that the "walls are about to cave in on Mr Sprecher," with further talk about the "prospect of fraud, an ongoing money shortage, a bad public perception, anemic ticket sales, and a rabid press corps."

For this, producers targeted Thibodeau for breaching contract, committing defamation and more. Originally, Thibodeau's lawyer tried to present him as an "innocent whistle-blower," but that couldn't stop the lawsuit. And on May 28, 2015, a judge ruled on summary judgment that the publicist was liable for breaching contract.

On Thursday, New York Appellate Justice David Friedman concurred.

"It is difficult to imagine a plainer case of a party to a contract utterly defeating the purpose for which the other party had entered into that contract, or a more blatant example of an agent's disloyalty to his principal," writes Friedman.

The justice echoes the trial judge's conclusion that Thibodeau's argument for avoiding liability is "a nonstarter."

Thibodeau contended that the producers undermined his ability to perform his duties and that he was required to engage in conduct that would implicate him in Hotton's fraud when it came to light.

"On the contrary, as Supreme Court observed in its decision, [Rebecca Broadway Limited Partnership] never instructed Thibodeau to issue a press release containing a statement that he believed to be false (or even any statement as to which he had doubts), nor is there any evidence that RBLP ever instructed Thibodeau to respond falsely to inquiries from the press. By Thibodeau’s own account, Sprecher, the RBLP principal, simply instructed him to keep silent about the Abrams issue, not to lie about it."

Friedman also points out that the publicist had no responsibility whatsoever for the financing of the project, and that his only role was to issue press releases and deal with reporters. To Thibodeau's note that he had to field questions from the media about the sensitive matter, Friedman writes that the publicist might well have felt uncomfortable given the order to not say much, but this basically was the producer's prerogative. 

"Needless to say, dealing with pressure from the press and the public is what publicists are paid to do," writes Friedman, suggesting an alternative course that the publicist might have taken. "RBLP, as Thibodeau’s principal, was entitled to limit the subjects that Thibodeau, as RBLP’s agent, was authorized to discuss substantively with the press and public; if Thibodeau was uncomfortable with that limitation on his authority, he was free to resign."

In defense, Thibodeau also is arguing that the producers weren't harmed by his actions because even if Runsdorf invested, there was still more money needed to be raised to proceed with the production of Rebecca. In a footnote, the appeals court decision says this is an argument that goes to damages, not liability. In other words, a trial jury might be asked to look at the prospects of Rebecca — whether Sprecher and other producers may have been willing to put up more of their own money — and decide what if anything Thibodeau owes for breaching contract.

A trial wouldn't just be about damages. The appeals court agrees that there is a triable issue on the producers' other claims of defamation and tortious interference. This aspect of the case could focus on Thibodeau's motives for his actions. If the production company is deemed to be a limited-purpose public figure, that means the plaintiff would have to prove Thibodeau acted with "actual malice" in anonymously contacting the investor. And with respect to tortious interference, Thibodeau contends he wasn't trying to harm the producers. With respect to this argument, in his opinion (read in full here), Friedman writes, "The truth of Thibodeau’s claim that he was acting in the interest of investors, rather than with the sole purpose of harming RBLP, is a contested issue to be determined by the factfinder at trial."