The Horror Was Movie’s Finances, Investors Say

     LOS ANGELES (CN) – The director of the horror movie “Last Resort” defrauded investors and negotiated a deal with a Lionsgate subsidiary behind their backs, three investors claim in court.
     Read Courthouse News’ Entertainment Law Digest.
     The investors sued Canadian director and producer Brandon Nutt, producer Chase Hudson, and Nutt’s companies, Collaborative Studios, NuttHouse Movie Picture Co. and Resort Movie, in Superior Court.
     Named plaintiffs are elderly investor Floyd Appling Jr. of Los Angeles and his company Appling Interests, Matthew Stropes of San Diego, and Doug Ivan of Dallas. They filed on their own behalfs and derivatively on behalf of Resort Movie LLC.
     The investors say they paid a total of $70,000 to Nutt and his companies for production and distribution of the 2009 low-budget horror flick, “The Last Resort.”
     The movie, about a group of women stranded at a haunted Mexican resort, was budgeted at $155,000, according to the complaint.
     The three men claim Nutt persuaded them to invest in “Last Resort” in early 2007.
     Floyd Appling invested $50,000 and Stropes and Ivan each put in $10,000 each, the complaint states.
     During his sales pitch, the investors say, Nutt did not tell them that the $155,000 budget was not enough to complete the movie and pay for post-production, marketing and distribution costs.
     They claims that Nutt and Resort Movie entered into a rights agreements with Grindstone Entertainment, a subsidiary of Lionsgate Entertainment Group, and with a sales agent, Plus Entertainment, without consulting them.
     Grindstone paid a $60,000 advance to Resort Movies, and Plus Entertainment took half of that to recoup its own $30,000 advance, the complaint states.
     The investors say they “were left in the dark as to the movie’s progress, whether the movie had generated any revenue, and when they would get a return on their investment.”
     Stropes claims he saw “Last Resort” on the shelf at a Blockbuster video store in the autumn of 2010, distributed by Lionsgate.
     Even then, Nutt left “plaintiffs in the dark as to when they would be paid back,” the complaint states.
     “Indeed, Mr. Nutt failed to provide plaintiffs with royalty or sales reports generated by the distributors of ‘The Last Resort’ in 2011 or 2012, which showed that ‘The Last Resort’ generated over $350,000. Mr. Nutt also failed to explain to the investors that the $60,000 advance payment made to Resort Movie LLC by Grindstone/Lionsgate had been nearly paid down by revenues attributable Resort Movie,” the complaint states.
     The investors seek at least $80,500 in damages for breach of contract, fraud, breach of fiduciary duty, and elder financial abuse.
     They are represented by Mateo Fowler, with Woolf Gafni & Fowler, of Houston.
     An email to Collaborative Pictures was bounced back to Courthouse News as undeliverable.
     Nutt and Hudson did not immediately respond to requests for comment.

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