Filmmaker Wants Shares From Maker Studios
LOS ANGELES (CN) - A former filmmaker for Maker Studios claims in court that the network broke a promise to pay him part of his $90,000 salary in shares.
William Watkins sued Maker Studios and its former executives Danny Zappin, Ben Donovan, and Ezra Cooperstein, on Monday in Superior Court. He seeks damages for breach contract, specific performance, fraud and deceit and other counts.
Maker Studios partnered with Internet celebrities to show their work on YouTube channels before Disney acquired the company for $500 million this year, though the cost of the deal may rise to $950 million.
Watkins claims CEO Zappin hired him in 2009 to produce content for the studio on a $90,000 annual salary.
"But seeing that Maker Studios might constrain its cash flow too much if it paid plaintiff his entire salary in cash, Zappin asked plaintiff to accept a monthly pay of $1,000, with the remaining $6,500 of his monthly compensation to be paid as stocks in Maker Studios," the 46-page lawsuit states. "Under this arrangement, plaintiff acquired at least 1,786,305 to 2,977,175 shares of common stocks for 3 percent to 5 percent equity in Maker Studios between June 2009 through February 2010, or, otherwise, at least 46,321 shares (463,210 shares after the 10-for-1 stock split) of common stocks." (Parentheses in complaint.)
Because he trusted the co-founders, Watkins says, he accepted the stock instead of $6,500 per month in compensation. He claims he made content for Maker to "reach and fill its empty channels as quickly as possible," and loaned the studio his equipment.
But in early 2010, Watkins says, Zappin and Cooperstein began to treat the unpaid portion of his salary as a loan.
"Thus, from February 2010 through December 2011, defendants became indebted to plaintiff for the sum of approximately $126,500," the lawsuit states.
When Watkins asked Maker about the shares he had earned before February 2010, he says the co-founders promised his stocks were "secure." But he says he looked at company records in June 2013 and discovered the executives had never issued him the stock.
"Plaintiff brings this lawsuit to rectify defendants' abuse and deception, and judicially secure his initial equity in Maker Studios, and to seek repayment or restitution for the deferred or loan portion of plaintiff's salary," the complaint states.
Last year Zappin sued Ben Donovan and his sister and Maker co-founder Lisa Donovan in Superior Court, claiming they ousted him from the company he helped form.
The siblings announced this month that they were stepping down from Maker.
Watkins is represented by Newton Tak of Beverly Hills.
Maker Studios did not immediately respond to an emailed request for comment on Tuesday.