Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Entertainment Law & FinanceKickerFeaturesTopicsLitigationTechnology Media and TelecomSectionsNewsLJN Newsletters

NY Court Rules Film Securities Suit Against Paramount Lacks Viable Claim

By Stan Soocher

The U.S. District Court for the Southern District of New York dismissed a securities suit brought by several investing financial institutions against Paramount Pictures. Allianz Risk Transfer v. Paramount Pictures Corp., 08 Civ. 10420(TPG). The Allianz plaintiffs paid about $231.3 million for securities in Melrose Investors LLC, through which Paramount procured funds to produce and distribute movies between 2004 and 2006. The plaintiffs alleged that statements in the Melrose private placement memorandum (PPM) were incomplete, false and misleading ' including that Paramount planned to use pre-sales to foreign distributors to lower cost and risk, although the studio had already decided its affiliated United International Pictures would handle foreign distribution. The complaint causes of action included for violation of '10(b) of the Securities Exchange Act of 1934 and of U.S. Securities and Exchange Commission Rule 10b-5.

Granting Paramount's motion to dismiss for failure to state a claim, U.S. District Judge Thomas P. Griesa noted, among other things, that “the actual decline in Paramount's use of international pre-sales was insufficient to find in any of Paramount's statements a material misstatement or the omission of a material fact, as required to state a claim under the federal securities laws. According to the amended complaint, 25% of the cost of films comparable to the Melrose Slate films and released by Paramount between 1998 and 2003 was financed by international pre-sales, as opposed to 12.5% of the cost of the Melrose Slate films. This does amount to a reduction. However, it is difficult to say that Paramount was no longer engaging in the practice on an 'opportunistic' or 'selective basis,' which is all the PPM claims.”

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Coverage Issues Stemming from Dry Cleaner Contamination Suits Image

In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.