Investors Say They Were Rolled on a Movie
PROVIDENCE, R.I. (CN) - Investors claim in court that so-called movie director Daniel Adams duped them for $5 million to make a movie that never began production - then was sentenced to prison for shady dealings on another movie.
Click here to read Courthouse News' Entertainment Law Digest.
Sakonnet Capital Partners sued Big Valley Investments LLC, Big Valley LLC and Daniel Adams, in Superior Court.
Sakonnet claims that Adams induced it into loaning him more than $5 million in 2010 "to finance the production of a new movie Adams was working on at the time by the name of 'The Big Valley.'"
Sakonnet says Adams and his LLCs claimed he would get more than $9 million in Louisiana tax credits for making the movie, and "sold and assigned" his rights to that money.
Adams claimed he already had $28 million in a bank account, "exclusively dedicated to this movie production," and that he needed $7 million more to reach his projected budget of $35 million, according to the complaint.
Sakonnet says that Adams, of Massachusetts, told it he had formed the two Louisiana LLCs, Big Valley Investments and Big Valley, to fund and produce the movie.
Among other things, Sakonnet says, Adams told it: "Big Valley Investments LLC was the holder of record and beneficial owner of certain tax credits to be issued by the State of Louisiana for the production of 'The Big Valley' in the State of Louisiana.
"The $28 million held in reserve and the additional funds to be financed by Sakonnet would be used and counted towards the final application to be submitted by Big Valley Investments LLC to the State of Louisiana for the issuance of the actual tax credits.
"In return for Sakonnet's agreement to finance the last tranche of monies needed to produce the movie, Sakonnet would receiver, inter alia, an assignment of all tax credits associated with the production of 'The Big Valley.'"
Sakonnet claims that Adams provided it with several documents supporting the $35 million movie budget, including agreements with actors hired to work on the film.
But Adams did not have $28 million set aside for the movie, and did not "take the necessary steps" to get Louisiana tax credits for it, according to the complaint.
He did, however, spend all the money Sakonnet loaned him "although the production never reached the cinematography stage," and he spent the money on "matters completely unrelated to the production of 'The Big Valley,'" the complaint states.
Not only that, Sakonnet says, Adams "recently pleaded guilty to inflating expenses on an application for the issuance of Massachusetts film tax credits for an unrelated movie production."
For this, Sakonnet says, Adams was sentenced to up to 3 years in Massachusetts state prison, and ordered to pay $4.4 million in restitution and serve 10 years probation after doing his time.
"'The Big Valley' movie production has come to a complete halt," the complaint states. "Upon information and belief, there is no money, organization or plans to start or complete the film."
Sakonnet seeks an accounting and compensatory and punitive damages for fraud, breach of contract, conversion, misrepresentation and unjust enrichment.
It is represented by Scott DeMello and Michael Lepizzera with Lepizzera & Laprocina, of Warwick, R.I.