LOS ANGELES (CN) – Two investors say they were suckered into investing $750,000 in the Natalie Portman movie “Hesher,” through “the greed and chicanery of two slick Hollywood producers and their equally slick lawyers.” They say the defendants knew, but concealed, there were “millions of dollars worth of promissory notes already in default when they began negotiating for plaintiffs to [invest] $750,000 in the picture.”
Gerald and Ian Fruchtman of New Jersey sued Hesher Productions, Matthew Weaver, Scott Prisand, the Eisner Frank & Kahan law office, attorney Darin Frank, and Corner Store Entertainment, in Superior Court.
Natalie Portman is not a party to the complaint.
The Fruchtmans say the move was financed through “a combination of traditional, legal investments, and also with approximately $2 million in usurious promissory notes, which defendants rolled over in a novel scheme, that were backed by security interests designed so the Fruchtmans could be cut out of the revenues after they paid their investment.”
The Fruchtmans say they became interested in the film in 2009 and early 2010 when they learned that it featured Portman, and the producers claimed they needed only $750,000 to complete it.
The Fruchtmans says that Eisner, Frank & Kahan, the law firm representing producers Matt Weaver and Scott Prisand, was also a “gross revenues participant in the success of the picture, taking ahead of all the investors 2.5 percent of any money that the picture earned from exhibition and sales through theatrical, cable television, home video, free television, video of demand, and all other media in the United States.”
But the says the firm hid their part in the deal until well after the Fruchtmans had invested, knowing that by taking 2.5 percent “off the top,” the lawyers would delay repayment of the plaintiffs’ investment, and “diminished the monies that could be paid to plaintiffs and any other profit participants.”
The Fruchtmans says were not asked to pay Hesher Productions LLC, which Weaver and Prisand formed to make the film, but were told to wire their money to Eisner, Frank & Kahan’s general operating account.
The Fruchtmans say the defendants knew there were “millions of dollars worth of promissory notes already in default when they began negotiating for plaintiffs to [invest] $750,000 in the picture,” but withheld the information despite a stipulation in the investment agreement that “all facts, circumstances and other documents which might materially affect the plaintiffs’ interpretation of documents given to them must be disclosed by Hesher Productions.”
The investors say that “the principal amount of several, if not all of these promissory notes was never actually paid by the note-holders to Hesher Productions for production of the picture, but that the notes were issued as replacement ‘roll-over’ of previous usurious notes issued by Hesher Productions to the same holders that had already matured.”
Bringing in the Fruchtmans’ money was the only way that Hesher Productions could pay back the notes or delay foreclosure, “provided that the plaintiffs were never paid the promised return,” according to the complaint.
The Fruchtmans say they demanded assurance that their investment agreement would be honored, but defendants’ lawyer, Darius Frank, “disavowed the agreement and stated that Hesher Productions was unable to honor the agreement because of the millions of dollars of defaulted promissory notes and due to foreclosure threats from note-holders, and because at least one other investor, Dreamagine, wanted to jump ahead of plaintiffs’ right to receive a share of revenues, and take more than Dreamagine would otherwise would be entitled in the agreement.”
The Fruchtmans seek no less than $750,000 in damages, and special, exemplary and punitive damages, for fraud, negligent concealment, and breach of contract.
They are represented by Richard Albert of North Hollywood.