Making movies is expensive and for amateurs, finding the money behind the movie is an important process that needs to be conducted properly.
An interesting case that I read about recently has dentist and investor, Jordan Cooper, alleging conversion, misrepresentation, fraudulent concealment, breaches of contract and fiduciary duty, violations of the Arkansas Security Act and infliction of emotional distress on the part of movie maker, Keith Patterson.
Cooper invested $43,000 in Patterson’s documentary, All About Ann: Governor Richards of the Lone Star State, expecting to be named a member of Ann Richards Movie LLC and receive compensation based on equity. When the movie was finished, it was sold for $200,000 to HBO, which aired the film. Cooper alleges that he never saw any of the money from this deal, as Patterson borrowed money from another equity partner. This debt was billed as an expense, according to Cooper, meaning that it was paid first, leaving nothing with which to pay other investors. Cooper alleges further that Patterson sold the film at a reduced cost in exchange for a job with HBO.
To be sure, Cooper’s strategy of “throwing the book” at Patterson is a little bit unconventional, but some of his claims seem to potentially hold merit. To work through every single claim exhaustively would take too long here, but I will demonstrate those that I think have the highest chance of success in this case.
Conversion
This law applies broadly to any time that one person acts in a manner that is inconsistent with the ownership rights of another. Conversion differs from theft in that it does not explicitly require dishonesty. Thus, any theft is a conversion, but not any conversion is a theft.
Cooper’s case for conversion stems from his assertion that Patterson sold the movie for less money than he could have gotten in exchange for being offered a job. If this could be proven true, it is possible that the allegation of conversion would stand. Cooper’s property – in this case, his equity in the film – would have been sold in a way that is inconsistent with his ownership rights to it. In practice, this would likely be very difficult to demonstrate.
Breach of fiduciary duty
Cooper may have more success with his allegation of breach of fiduciary duty. As the managing partner in the LLC in which Cooper invested, Patterson had a fiduciary duty toward Cooper. In other words, he had an obligation to act in his best interests. The law forbids those with a fiduciary duty from acting in a way that is adverse or contrary to the interests of the client.
While selling the movie to HBO for a reduced rate in exchange for a job offer would be a clear-cut breach of fiduciary duty, we have already established that this would be difficult to prove in court. While it would be slightly trickier to demonstrate that the structuring of the second loan as a business expense was intended to deprive Cooper of his rightful due as an equity holder in the film, it may be the best shot that he has to receive compensation.
The ins-and-outs of the movie industry can be tricky, confusing, and riddled with pitfalls. As a chair of the Sports & Entertainment practice at Scarinci Hollenbeck, I’ve been able to learn how to avoid some of these issues. If you are interested in learning the legal aspects of the film industry check out some of my previous posts:
“The Wolf of Wall Street” Filmmakers Sued for Defamation
How Do Film Production Tax Credits Work?
Joe Pesci Settles Salary Lawsuit Over ‘Gotti’ Film
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
The Money Behind The Movie
Author: Scarinci Hollenbeck, LLC
Making movies is expensive and for amateurs, finding the money behind the movie is an important process that needs to be conducted properly.
An interesting case that I read about recently has dentist and investor, Jordan Cooper, alleging conversion, misrepresentation, fraudulent concealment, breaches of contract and fiduciary duty, violations of the Arkansas Security Act and infliction of emotional distress on the part of movie maker, Keith Patterson.
Cooper invested $43,000 in Patterson’s documentary, All About Ann: Governor Richards of the Lone Star State, expecting to be named a member of Ann Richards Movie LLC and receive compensation based on equity. When the movie was finished, it was sold for $200,000 to HBO, which aired the film. Cooper alleges that he never saw any of the money from this deal, as Patterson borrowed money from another equity partner. This debt was billed as an expense, according to Cooper, meaning that it was paid first, leaving nothing with which to pay other investors. Cooper alleges further that Patterson sold the film at a reduced cost in exchange for a job with HBO.
To be sure, Cooper’s strategy of “throwing the book” at Patterson is a little bit unconventional, but some of his claims seem to potentially hold merit. To work through every single claim exhaustively would take too long here, but I will demonstrate those that I think have the highest chance of success in this case.
Conversion
This law applies broadly to any time that one person acts in a manner that is inconsistent with the ownership rights of another. Conversion differs from theft in that it does not explicitly require dishonesty. Thus, any theft is a conversion, but not any conversion is a theft.
Cooper’s case for conversion stems from his assertion that Patterson sold the movie for less money than he could have gotten in exchange for being offered a job. If this could be proven true, it is possible that the allegation of conversion would stand. Cooper’s property – in this case, his equity in the film – would have been sold in a way that is inconsistent with his ownership rights to it. In practice, this would likely be very difficult to demonstrate.
Breach of fiduciary duty
Cooper may have more success with his allegation of breach of fiduciary duty. As the managing partner in the LLC in which Cooper invested, Patterson had a fiduciary duty toward Cooper. In other words, he had an obligation to act in his best interests. The law forbids those with a fiduciary duty from acting in a way that is adverse or contrary to the interests of the client.
While selling the movie to HBO for a reduced rate in exchange for a job offer would be a clear-cut breach of fiduciary duty, we have already established that this would be difficult to prove in court. While it would be slightly trickier to demonstrate that the structuring of the second loan as a business expense was intended to deprive Cooper of his rightful due as an equity holder in the film, it may be the best shot that he has to receive compensation.
The ins-and-outs of the movie industry can be tricky, confusing, and riddled with pitfalls. As a chair of the Sports & Entertainment practice at Scarinci Hollenbeck, I’ve been able to learn how to avoid some of these issues. If you are interested in learning the legal aspects of the film industry check out some of my previous posts:
“The Wolf of Wall Street” Filmmakers Sued for Defamation
How Do Film Production Tax Credits Work?
Joe Pesci Settles Salary Lawsuit Over ‘Gotti’ Film
California Extends Film Tax Credit
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
