Film Financing Still Snarled in Legal Fight

     SCHENECTADY, N.Y. (CN) – A screenwriter-director asked a state judge to rule that a vote ousting him from a film project is invalid, as is the contract to find much-needed financing that endorsed his removal.
     The complaint, filed by Tennyson Bardwell and his Daydreamer Films LLC, comes less than a month after the two were named as defendants in a separate, related case.
     Common to both lawsuits in Schenectady County Supreme Court is an attempt to make an $8 million feature movie from “Dancehall,” a murder-mystery set in the Adirondack Mountains of Upstate New York.
     Bardwell, a writer-director with two movies to his credit, created a screenplay from the book by local author Bernard Conners and delivered it in early 2010 to Dancehall LLC, a company formed to steer the project. Bardwell was one of three managing members of the company.
     But after a contract promising $7.5 million to the movie fell apart, a group of Albany-area business executives that had pledged $1.1 million for development became concerned about their investment. They had one of their group, retired banker Daniel Hogarty, named as investment manager of the company in 2011, and Hogarty, voting with Edwin Graham, another managing member of Dancehall LLC, moved to oust Bardwell early this year, saying he stood in the way of new financing.
     Dancehall LLC sued Bardwell and Daydreamer Films in early April, asking the state court to affirm the vote.
     Bardwell and Daydreamer countersued, claiming the vote came “without proper notice, authority or cause.”
     Named as defendants in the countersuit are Dancehall LLC; Graham and his Puddle Jumper Films LLC; and Hogarty, individually and as investment manager.
     Bardwell claims in the countersuit that Hogarty, when he was named investment manager, was given “certain designated and limited powers set forth as negative covenants” – including that no agreements for a third party to help secure financing and no establishment of foreign or domestic distribution rights could be made without his consent.
     These agreements “do not confer upon Hogarty the authority to vote on the removal of a voting manager of the company,” the complaint states.
     That would make the Hogarty-Graham vote to remove Bardwell as managing member “unauthorized and void,” according to the complaint.
     The countersuit also contends that when Graham signed an agreement in August 2011 to bring on Crescendo Capital Advisors LLC to help secure new financing for the film, he overstepped his authority as a managing member.
     According to the complaint, Hogarty and the local investors had contacted Crescendo – unbeknownst to Bardwell – and hammered out an agreement that offered Crescendo a $250,000 up-front payment and another $250,000 once new financing was secured.
     The countersuit contends the contract constituted a “significant matter” that required a unanimous vote of the three managing members of Dancehall LLC: Graham, Bardwell and Anne Marie Lizzi, who has worked with Bardwell as an editor.
     The countersuit contends Lizzi was a managing member when the Crescendo contract was being negotiated. But Graham and Hogarty say she had relinquished that role a year earlier.
     The lack of a unanimous vote on the contract “constitutes a breach” of Dancehall LLC’s operating rules, according to the complaint. “[W]ithout the necessary unanimous vote and agreement of the managers, it is invalid and subject to rescission.”
     The countersuit contends that after the contract was signed, Crescendo began suggesting that “significant changes” to the management structure at Dancehall LLC “would have to be made purportedly in order to attract the interests of foreign investors to the picture.”
     In October 2011, the complaint states, Hogarty advised Graham and Bardwell by letter of the changes, which required that they resign as managing members and become at-will employees of Dancehall LLC.
     Graham, who originally was to be lead producer of the movie, would become a producer reporting to a new lead producer.
     Bardwell, originally designated as writer, director and producer, would become a screenwriter also reporting to the lead producer.
     The Hogarty letter said Bardwell might be offered the position of director if foreign sales agents and lenders agreed; otherwise, he could become assistant director or could leave the project, with a buyout.
     Jason Kliot, an independent producer who in 2006 received an Academy Award nomination for best feature-length documentary, had been recruited by Crescendo as lead producer.
     Bardwell says in his countersuit that he rejected the changes outlined in Hogarty’s letter, “and since that time has made repeated attempts in person and through counsel to discuss various options to move this project of making the picture forward …” But he says his overtures have been met “with continuing demands that he relinquish his role as director along with surrendering his position as a manager of the company, the majority of his profit participation, and that he be relegated to an at-will employee of the company.”
     In his countersuit, Bardwell asks the court to find that Hogarty is not a voting manager of Dancehall LLC; that the vote removing Bardwell and Daydreamer Films as managing/voting members is invalid; and that the contract with Crescendo is void.
     He is represented by John Maloney, with Carter, Conboy, Case, Blackmore, Maloney & Laird, of Albany.
     The complaint indicates that an injunction sought by Dancehall LLC to keep Bardwell from asserting any management role in the movie was denied on April 13 by Justice Barry D. Kramer, after oral arguments in Schenectady County Supreme Court.
     The countersuit contends that after that denial – and just a day before it knew an answer would be filed – Dancehall LLC dropped its action, “thereby preventing Bardwell and Daydreamer from answering the complaint.”
     A search of the Dancehall LLC complaint file in Schenectady County shows that on April 24 the company filed a stipulation of voluntary discontinuance without prejudice. Signing the document was attorney James Potter with Hinman Straub of Albany.

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