MANHATTAN (CN) - Investors say Paramount Pictures cost them $40 million by misrepresenting the risks of a private placement offering to finance Paramount movies.
In their federal complaint, Allianz Risk Transfer, Marathon Structured Finance Fund LP, Newstar Financial, and Munich Capital Markets New York say Paramount cost them their entire $40.1 million investment in "Melrose Investors LLC."
Plaintiffs say the "Melrose slate" of Class B Notes was "an investment vehicle sponsored by Paramount to finance to production of a slate of films to be produced, released and distributed by Paramount between April of 2004 and March of 2006 (the 'Melrose Slate'). The securities were issued by an entity named Melrose Investors LLC which served as a conduit for the investment proceeds to Paramount."
Plaintiffs say Paramount induced them to invest by lying about its risk mitigation and/or by changing its risk mitigation techniques without informing them.
"Plaintiffs expect to lose their entire investment of $40.1 million," the complaint states.
Plaintiffs are represented by James Janowitz with Pryor Cashman.
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