LOS ANGELES (CN) – A lender claims in Superior Court that the producer-directors of “Transylmania” aka “Dorm Daze III” owe it more than $21 million, for one of the worst movies ever made.
Third Eye Capital Corp., as agent for the lender, Strative Capital Ltd., sued the borrower, Hill & Brand Productions 7 LLC, and a slew of others, alleging breach of contract, fraud and negligent misrepresentation.
Most of the plaintiffs’ ire is directed at the producer-directors, defendants Scott Hillenbrand and David Hillenbrand.
“While Hollywood is no stranger to wrongdoing, the bold fraud perpetrated by the defendants and described in this complaint is staggering,” the complaint begins.
The complaint calls the film, released nationwide on Dec. 4, 2009, “one of the greatest box office flops of all time.”
Third Eye claims that Strative Capital loaned the moviemakers an initial $11.7 million, with an option on another $2 million, based on the defendants’ claims of full disclosure and predictions of success. A second agreement called for another $6 million loan, according to the complaint. From July 15 to Dec. 31, 2009, Strative says, it loaned the defendants a total of $21,745,000.
However, the complaint states: “Much more creative than the film was the fraudulent scheme perpetrated by the Hillenbrands and their ‘team’ to obtain the financing to release the film. Lender provided the financing to support the domestic theatrical release of the film. This is referred to in the movie business as prints and advertising, or P & A, financing. Ultimately, a significant portion of the P & A financing ended up in the hands of the Hillenbrands and members of their ‘team’ that aided their fraudulent plan. This was no accident.
“The Hillenbrands claim to have spent $5 million producing the film in 2007. The evidence reveals that the Hillenbrands were unable to find theatrical distribution for the film. While this is the unfortunate result for many film producers, the Hillenbrands refused to accept the market’s rejection of the film. Instead, they formed their own distribution company and re-branded the film a ‘Vampire Spoof’ based on the popular ‘Twilight’ franchise and HBO’s True Blood. Unfortunately, the film had no relation to ‘Twilight’ or ‘True Blood.’ As one reviewer noted, the film was not even a spoof. As the Boston Globe stated, Transylmania is just ‘a very bad film.'”
The complaint adds: “Starting on or around June 2009, defendants David and Scott Hillenbrand solicited lender to finance print and advertising costs associated with the domestic theatrical release of the film ‘Transylmania’ aka ‘Dorm Daze 3.’ The Hillenbrands provided written materials as part of the initial solicitation. …
“The Hillenbrands presented three potential budgets for the P & A Financing-$8.5, $10.5 and $12 million. The Hillenbrands represented that they had prepared the budgets based on consultation with a host of experienced media executives and also by conducting an exhaustive amount of due diligence analyzing similar films and their releases over the last five years. The Hillenbrands stated that they were comfortable with all three budgets and had created a ‘budget for what [they] really believe [they] need to be most effective – and no more.’ The Hillenbrands represented that they could attract the audience necessary 10 repay the P & A Financing with any of these three budgets.” (Brackets in complaint.)
Strative claims the movie opened on 1,007 screens on Dec. 4, 2009, earning an average of $262 per screen, “the worst performance ever recorded for a wide release by Box Office Mojo, which began recording figures in the late 1970s.”
The abysmal reviews showed why, Strative says.
“On December 23, 2009, after the film’s catastrophic release at the box office, lender notified the Hillenbrands and borrower that the loan was in default due to the material adverse change in the borrower’s financial standing due to the film’s performance,” the complaint states. “Lender made demand on borrower to pay the debt in full. Borrower insisted the loan was not in default. The Hillenbrands refused to take responsibility for the film’s dismal performance. As the film critics pointed out, the content, the acting and the script were all beyond redemption. Rather than accept that reality, the Hillenbrands attempted to blame lender for the failure. The Hillenbrands alleged that the film would have succeeded but for the lender’s failure to provide additional P & A funds in a timely manner. There is no merit to these wild accusations.”
Strative and Third Eye claim: “Of the $18.7 million in loan proceeds advanced by lender, at least $600,000 went directly to the Hillenbrands or Hillenbrand-owned entities. Nearly $200,000 was disbursed to third parties for non-P & A costs. Further, the Hillenbrands could not account for an additional $75,000 in expenditures, Lastly, the investigation uncovered that Full Circle had substantially exceeded the budgeted marketing plan-by almost 800 percent in one category, and over 200 percent in several others.
“Thereafter, in the latter part of 2010, lender investigated other representations the Hillenbrands had made about their library titles, the film, and various other factors, Ultimately, lender learned that the film was not a ‘vampire spoof’ poking fun at ‘Twilight’ or ‘True Blood.’ Despite all of the representations provided to the contrary, the film had nothing to do with ‘Twilight’ or ‘True Blood.’ As such, all of the projections and financial analyses regarding ‘Twilight’ and past spoof films were pointless.”
Also named as defendants are Hill & Brand Entertainment LLC, Full Circle Releasing LLC, Larry Gleason, Steve Rockabrand, Joseph Craig, Gary Faber, Entertainment Researching and Marketing, Paul Westphal, and Westphal Advisory Service.
Third Eye seeks compensatory, exemplary, and punitive damages, and attorneys’ fees.
It is represented by Ronald Sittler with Blank Rome.
An attorney for the Hillenbrands called the lawsuit “completely meritless.”
“The plaintiffs saw the finished film numerous times before they chose to invest,” Mitchell Silberberg & Knupp attorney Kim Swartz said in a statement. “In any event, David and Scott Hillenbrand, and their team of top professionals did everything they could to try to get their investors a return on their investment, even to the Hillenbrands’ own financial detriment, and as stated in the complaint, in spite of the plaintiffs’ failure to provide the agreed-upon P&A funds in a timely manner. The Hillenbrands look forward to having the plaintiffs’ completely meritless claims dismissed and to prosecuting their own claims.”