Post by The Ultimate Nullifier on Mar 23, 2015 9:12:52 GMT -6
deadline.com/2015/03/worldview-entertainment-lawsuit-investor-san-francisco-giants-heiress-sarah-johnson-birdman-1201396896/
‘Birdman’ Financiers Worldview Slammed With $70M Lawsuit By Heiress Investor
The legal fallout continues after the shakeups started last June at the formerly Christopher Woodrow run film financing company. This time it is the one of the biggest investors in Worldview Entertainment taking the once high flying company that had multi-picture deals with The Weinstein Company and a $5.458 million stake in the Alejandro Gonzalez Inarritu directed Birdman to court. Sarah Johnson, who is the daughter of the founder of financial services giant Franklin Templeton Investments and owner of the San Francisco Giants Charles B. Johnson, wants her “nearly $25 million” and more back from the semi-shuttered and now highly litigated company. “After fraudulently inducing Plaintiff to invest millions of dollars in the Worldview Film Funds, Defendants Cestone, Woodrow, Conners and Morgan, and the corporate entities that they managed, engaged in gross mismanagement and breaches of fiduciary duty,” says a 18-claim lawsuit filed in New York Supreme Court by Johnson on March 12, naming the co-founder, the fired former CEO, the current COO and the former CFO among defendants
Having linked up with Worldview in 2011 and been convinced by the principals to sink millions into its various funds and slates at various stages over 3-years with promises of “20% return on investment” and credits like being an EP on Birdman, Johnson is now seeking some very big bucks. According the detailed 38-page complaint, she wants “compensatory damages of at least $20 million, the precise amount to be proven at trial, as well as punitive damages in the amount of at least $50 million, attorney’s fees and costs and a full accounting relating to Plaintiff’s funds.” A far cry from the happier times of late 2013 in this photo to the left with Cestone, Woodrow and Conners at the far right when the plaintiff gained an equity stake in the company, Johnson now slams Worldview’s execs with a “shameless dereliction of duty” in running the company and her investments.
Echoing elements of Woodrow and Morgan’s own ongoing legal actions to some degree, Johnson’s lawsuit points to a culture at Worldview that seems even more shell game than one has come to expect from an industry that loves to take from Peter to pay Paul. “Among other things, Defendants have entered into (or permitted to be entered into) agreements with the sole objective of taking exorbitant management and/or producer fees from Plaintiff’s sizeable investments and have failed to meet even minimal thresholds of reasonableness in connection with their management of certain film assets, thereby irrevocably damaging Plaintiff’s projected returns,” alleges the March 12 complaint.
A financial forensics examination of what was allegedly really going on at Worldview, Johnson’s lawsuit is full of specific details. For instance, with $2 million in management and production fees being paid out from one Worldview entity to another without Johnson’s knowledge, and Woodrow supposedly telling the company’ lawyers to “disburse escrowed investor funds for his personal use,” the books were a mess. Even more so, the March 12 complaint details, because vital elements of deals on the table weren’t being addressed. “Investors, including Plaintiff, are now projected to lose their entire investment in Devil’s Knot due to Defendants’ lapse in diligence in managing a loan default to a mezzanine lender on the film,” the filing says of the 2013 Atom Egoyan directed film that Worldview put $4.5 million in to and Johnson served as an EP on. The compliant also allegedly reveals how a Worldview entity “wired $6 million as ‘partial funding’ to The Weinstein Company …for the ..film Tulip Fever.” The document goes on to say that “upon information and belief, Woodrow authorized this ‘partial funding’ without any requisite legal documentation in place with TWC (thus subjecting WEC II and its investors to significant risk) and against the business advice of Worldview Inc.’s former CFO, Margaret Chu.” And like a promised $30 million fund that barely hit over half of that target but supposedly used Johnson’s cash like it had and would not repay her when requeted, there is more in the investor’s lawsuit – like that Johnson even convinced her own sister to loan Worldview, Inc $1.5 million in August 2012 on the promise that the loan would be repaid by February 2014 – which it hasn’t.
“These unlawful actions have tarnished Worldview’s name, alienated investors, and eroded the value of Sarah’s investments, Johnson’s primary lawyer Orin Snyder of the NYC offices of Gibson Dunn told me. “This lawsuit will hold the defendants accountable for their misconduct.”
Even if Johnson is successful in her jury seeking complaint, that accountability may be a hard and long fought battle. With Woodrow and Worldview suing each other, Morgan is also in court against the latter for an allegedly promised EP credit on the Michael Keaton starring Birdman and nearly $3 million he invested in the partial financier of the Oscar winning pic. As a part of that case, a NY Supreme Court judge recently reinforced putting payments from the Fox Searchlight distributed film on ice while the legal action continues.
Formed in 2007, Worldview may say its still a self proclaimed functioning entity with a half a dozen pics in the pipeline but, having shut down its NYC office earlier this month and seen some filmmakers turn to Kickstarter to finance their docu project after promised financing dried up, this latest lawsuit has to be a hard blow to an already heavily bruised company. The defendants have 20 days to respond to the complaint once they are personally served with the March 12-dated summons.
Now in her place in the legal lineup, Johnson hopes to gain her desired funds out of Worldview and Cestone’s interest in future film proceeds from the likes of Birdman, 2011’s Killer Joe, and the Tom Hardy starrer Child 44 set to be released on April 17 domestically. Those proceeds might have been more lucrative if Worldview had ended up co-financing more than just one of what was expected to be four TWC films in a 5-year co-financing agreement. Starring Christoph Waltz, Dane DeHaan and Alicia Vikander, the Justin Chadwick directed period drama Tulip Fever is supposed to come out later this year.
Not that this expensive bad experience has caused Johnson to give up on the movie biz. She recently co-founded Green Hummingbird Entertainment, a financing and production company centering on provocative director driven filmmaking.
‘Birdman’ Financiers Worldview Slammed With $70M Lawsuit By Heiress Investor
The legal fallout continues after the shakeups started last June at the formerly Christopher Woodrow run film financing company. This time it is the one of the biggest investors in Worldview Entertainment taking the once high flying company that had multi-picture deals with The Weinstein Company and a $5.458 million stake in the Alejandro Gonzalez Inarritu directed Birdman to court. Sarah Johnson, who is the daughter of the founder of financial services giant Franklin Templeton Investments and owner of the San Francisco Giants Charles B. Johnson, wants her “nearly $25 million” and more back from the semi-shuttered and now highly litigated company. “After fraudulently inducing Plaintiff to invest millions of dollars in the Worldview Film Funds, Defendants Cestone, Woodrow, Conners and Morgan, and the corporate entities that they managed, engaged in gross mismanagement and breaches of fiduciary duty,” says a 18-claim lawsuit filed in New York Supreme Court by Johnson on March 12, naming the co-founder, the fired former CEO, the current COO and the former CFO among defendants
Having linked up with Worldview in 2011 and been convinced by the principals to sink millions into its various funds and slates at various stages over 3-years with promises of “20% return on investment” and credits like being an EP on Birdman, Johnson is now seeking some very big bucks. According the detailed 38-page complaint, she wants “compensatory damages of at least $20 million, the precise amount to be proven at trial, as well as punitive damages in the amount of at least $50 million, attorney’s fees and costs and a full accounting relating to Plaintiff’s funds.” A far cry from the happier times of late 2013 in this photo to the left with Cestone, Woodrow and Conners at the far right when the plaintiff gained an equity stake in the company, Johnson now slams Worldview’s execs with a “shameless dereliction of duty” in running the company and her investments.
Echoing elements of Woodrow and Morgan’s own ongoing legal actions to some degree, Johnson’s lawsuit points to a culture at Worldview that seems even more shell game than one has come to expect from an industry that loves to take from Peter to pay Paul. “Among other things, Defendants have entered into (or permitted to be entered into) agreements with the sole objective of taking exorbitant management and/or producer fees from Plaintiff’s sizeable investments and have failed to meet even minimal thresholds of reasonableness in connection with their management of certain film assets, thereby irrevocably damaging Plaintiff’s projected returns,” alleges the March 12 complaint.
A financial forensics examination of what was allegedly really going on at Worldview, Johnson’s lawsuit is full of specific details. For instance, with $2 million in management and production fees being paid out from one Worldview entity to another without Johnson’s knowledge, and Woodrow supposedly telling the company’ lawyers to “disburse escrowed investor funds for his personal use,” the books were a mess. Even more so, the March 12 complaint details, because vital elements of deals on the table weren’t being addressed. “Investors, including Plaintiff, are now projected to lose their entire investment in Devil’s Knot due to Defendants’ lapse in diligence in managing a loan default to a mezzanine lender on the film,” the filing says of the 2013 Atom Egoyan directed film that Worldview put $4.5 million in to and Johnson served as an EP on. The compliant also allegedly reveals how a Worldview entity “wired $6 million as ‘partial funding’ to The Weinstein Company …for the ..film Tulip Fever.” The document goes on to say that “upon information and belief, Woodrow authorized this ‘partial funding’ without any requisite legal documentation in place with TWC (thus subjecting WEC II and its investors to significant risk) and against the business advice of Worldview Inc.’s former CFO, Margaret Chu.” And like a promised $30 million fund that barely hit over half of that target but supposedly used Johnson’s cash like it had and would not repay her when requeted, there is more in the investor’s lawsuit – like that Johnson even convinced her own sister to loan Worldview, Inc $1.5 million in August 2012 on the promise that the loan would be repaid by February 2014 – which it hasn’t.
“These unlawful actions have tarnished Worldview’s name, alienated investors, and eroded the value of Sarah’s investments, Johnson’s primary lawyer Orin Snyder of the NYC offices of Gibson Dunn told me. “This lawsuit will hold the defendants accountable for their misconduct.”
Even if Johnson is successful in her jury seeking complaint, that accountability may be a hard and long fought battle. With Woodrow and Worldview suing each other, Morgan is also in court against the latter for an allegedly promised EP credit on the Michael Keaton starring Birdman and nearly $3 million he invested in the partial financier of the Oscar winning pic. As a part of that case, a NY Supreme Court judge recently reinforced putting payments from the Fox Searchlight distributed film on ice while the legal action continues.
Formed in 2007, Worldview may say its still a self proclaimed functioning entity with a half a dozen pics in the pipeline but, having shut down its NYC office earlier this month and seen some filmmakers turn to Kickstarter to finance their docu project after promised financing dried up, this latest lawsuit has to be a hard blow to an already heavily bruised company. The defendants have 20 days to respond to the complaint once they are personally served with the March 12-dated summons.
Now in her place in the legal lineup, Johnson hopes to gain her desired funds out of Worldview and Cestone’s interest in future film proceeds from the likes of Birdman, 2011’s Killer Joe, and the Tom Hardy starrer Child 44 set to be released on April 17 domestically. Those proceeds might have been more lucrative if Worldview had ended up co-financing more than just one of what was expected to be four TWC films in a 5-year co-financing agreement. Starring Christoph Waltz, Dane DeHaan and Alicia Vikander, the Justin Chadwick directed period drama Tulip Fever is supposed to come out later this year.
Not that this expensive bad experience has caused Johnson to give up on the movie biz. She recently co-founded Green Hummingbird Entertainment, a financing and production company centering on provocative director driven filmmaking.