On Friday in aSanta Ana, California federal courtroom, what may be the biggest bomb in amovie career filled with them was aimed squarely at Franchise Pictures CEO ElieSamaha.
That's whenJudge Alicemarie Stotler issued tentative rulings pertaining to next week'sformal judgments in the matter of German rights broker Intertainment GmbH'slawsuit against Franchise.
In June, itlooked like Samaha had dodged a bullet when the jury assigned the $77 millioncompensatory damage award entirely to Franchise LLC, and nothing to Samahapersonally or the 18 one-off Franchise production companies that hold thecopyrights to the Franchise-Intertainment slate of films.
But according toStotler, she is now inclined to approve a judgment where all the Franchisedefendants, including Samaha, are jointly and severally liable for the entire$77 million compensatory damage award.
And in a movethat had Franchise lawyers reeling, Stotler also placed alter ego liabilityagainst the Franchise defendants. That means that, due to the way Stotler nowsees things, Samaha may have to pony up tens of millions of dollars outof his own pocket to pay for the budget fraud to Intertainment CEO Rudiger"Barry" Baeres and his company.
In June, Samahahad "wished Barry luck" in collecting the $77 million compensatory award fromFranchise LLC, which is currently an empty shell. And the one-off productioncompanies that hold the copyrights to the Franchise slate are buried in over$200 million of debt owed to Franchise lender Comerica Bank and Warner Bros.,which released the Franchise slate in North America via a "rent-a-studio"distribution deal.
But if Stotlersticks to her guns when she enters the judgment next week, Baeres andIntertainment now will be able to go after Samaha personally for the entire $77million in compensatory damages if there's no money left in the other Franchisecompanies.
Samaha is alsoon the hook personally for $4 million in punitive damages that the juryassigned to him in June. The jury also assigned $1 million in punitive damagesto Franchise LLC, and $24 million in punitives against the 18 one-offcompanies.
Franchise lawyerWilliam Price told Screen International that Stotler will have "changed thescoreboard" if she alters the $77 million jury compensatory awards thatassigned nothing to Samaha personally; and Price says that, via post-trialmotions or appeals, Samaha can fight any change by Stotler in the jury rulings.
Speaking on thecondition of anonymity, a former Franchise executive said that Samaha is now undereven more pressure to testify against Comerica Bank in Intertainment's upcomingarbitration against Comerica and completion bond companies Film Finances andWorldwide Film Completion.
Intertainment isseeking $100 million in damages from the companies after claiming theyconspired with Franchise to defraud Intertainment via the budget-pumpingscheme. On the other side, Comerica is seeking $72 million in cash guaranteesthat Intertainment refused to pay when Franchise delivered some of the films inthe litigation.
"There's no waySamaha can get out of this without testifying against the bank," says thesource.
Samaha, whotestified at trial that he presently has a negative net worth of $10million, could not be reached for comment at presstime. He has longmaintained that Comerica executives Morgan Rector and Jared Underwood, who areco-defendants in the Intertainment lawsuit against Comerica, had no knowledgeof any budget fraud in the Franchise-Intertainment productions.