Legal Question in Entertainment Law in California

The financier/producer of a movie production failed to get paperwork signed before lending money for the project. Now the producer/IP holder won't sign anything. There is enough e-mail to build a case but nothing in black and white. There are many witnesses that will testify as to the financier producing more then 75% of the project. How can the financier exploit the project to get back his money? Can he seize the assets, forclose and do lender in completion? Use the footage he paid for but retool it for a new script and change things 20%? Or are his only options is to settle it in court? If so how much (ball park) would that cost? Thank you for your help.

Asked on 10/13/14, 4:48 pm

2 Answers from Attorneys

Frank Natoli Natoli-Legal, LLC

This is not an appropriate question for this free and public Q&A forum. You need to consult a lawyer in private and discuss all the facts and circumstances involved and in detail.

There may be a number of ways of approaching this. For example, whenever two or more people come together for some profit motive a legal general partnership is established. The first order of business is to establish exactly what your relationship is in this scenario and which body of law governs (CA Partnership Act, Contract law, etc.). If you are taking this seriously, you will absolutely require the help of an attorney and court involvement is always a possibility depending on how intractable the parties are.

If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Our firm is now referred by the American Bar Association (see under the New York section):

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DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.

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Answered on 10/14/14, 6:47 am
Keith E. Cooper Keith E. Cooper, Esq.

No intelligent financier would ever give someone money without a written agreement, regardless of how urgently the producer needs it. Copyright law works the same as real property law in that any transfers of rights must be in writing signed by the parties. If you don't have a written contract, you don't own any rights. To use an analogy: if you gave someone money to buy a house without getting a written promissory note and deed of trust, you wouldn't be able to foreclose on the house if they didn't pay you back.

Unfortunately, without a writing that clearly sets out the intent, the money might be viewed as a gift. If you have correspondence which indicates the intent, you might be able to go to court and show the money was an investment and you are entitled to a return IF there are any profits. That would not, however, give you any right of exploitation unless you can show that was part of the agreement. Unlike a loan, an investment involves an element of risk and there is never a guarantee that you will get your money back--you don't get to go in and take over the company just because you made an investment that didn't produce a return.

That said, the parties may agree to settle on any terms they want.

Initiating a lawsuit generally costs a minimum of $25,000 and can go up from there, depending on the amount of work required to get the other side to settle or cooperate. (My office does not handle litigation, but that is a commonly quoted figure for doing the initial work.)

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Answered on 10/17/14, 4:37 pm

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