Fight for Control of Animation Studio

LOS ANGELES (CN) - An animation studio filed a $5 million lawsuit against a holding company that it claims interfered with its attempt to take control of the U.S. arm of troubled French production and animation company Moonscoop.

Michael Young Productions sued Moonscoop U.S. Holdings in Superior Court, alleging breach of contract, interference and other counts.

Michael Young Productions is owned by Welsh-born animator Mike Young, whose production company became part of the Moonscoop Group in 2006. Young is not a party to the lawsuit.

Moonscoop U.S. Holdings is a subsidiary of Moonscoop SA of Paris, France, which became insolvent this year. Michael Young Productions owns 49 percent of Los Angeles-based Moonscoop LLC, and Moonscoop U.S. Holdings holds 51 percent, according to the complaint.

Young's production company claims its attempts to take control of the LLC were blocked at every turn.

Before the French animator went into receivership in June, Young says, it offered to buy the holding company's interest in Moonscoop LLC but was told that, considering the holding company's liabilities, its offer was too low.

The French company also declined to entertain Young's offer to buy the holding company outright, the complaint states.

Instead, Moonscoop SA offered for sale the holding company's assets to satisfy its creditors, while blocking Young's attempts to buy the holding company's assets, according to the lawsuit.

Under the parties' operating agreement, Young claims that it has a right, through Moonscoop LLC, to buy the holding company's shares. He also claims a "'right of first offer'" that bars the transfer of the holding company's assets unless another buyer makes a superior offer.

But according to the lawsuit: "U.S. Holdings has taken no steps to ensure that MYPI's [Michael Young Productions Inc.] rights under the operating agreement are fulfilled, but rather has acted to benefit SA at the expense of MYPI."

The financial uncertainty surrounding Moonscoop's U.S. operations means Young has missed out on a tie-in with a popular toy, the complaint states. He claims that clients have dropped out of deals with the studio and the financial turmoil has led to delays in production and financing.

Young claims the holding company shared Moonscoop LLC's trade secrets in August with potential buyers, including Moonscoop's competitors.

Young wants Moonscoop U.S. Holdings enjoined from interfering with its rights under the operating agreement, and $5 million in damages for breach of contract, breach of faith, breach of fiduciary duty, intentional interference with prospective economic advantage, and violation of business and professions codes.

Michael Young Productions is represented by Laura Brill with Kendall Brill & Klieger.

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