Courthouse Steps

CASE CAPTION: Maverick Records LLC, Tadpole Records L.P., Wise Guy LLC and Rosie Enterprises LLC v. SR/MDM Venture Inc., WBR/Sire Ventures, Inc., Warner Bros. Records Inc., Warner Music Group Inc. and Time Warner Inc., L.A. Superior Court # BC312716.

CAUSES OF ACTION: Breach of joint venture agreement; breach of fiduciary duty; inducing breach; fraud; accounting; declaratory relief; and injunctive relief.

COMPLAINT ALLEGATIONS: Maverick Records is a partnership between the plaintiffs and Warner Bros. Records started with $10 million in 1993. Since then, Maverick has generated revenues of $900 million and profits of $100 million for the Warner Music Group. The plaintiffs have been attempting to settle disputes over accounting for months and told the defendants that they would file suit in California if they were not resolved. On March 24, 2004, while negotiations were still in progress, the defendants without warning filed a preemptive action in Delaware ' a blatant instance of forum shopping. Members of Maverick include Tadpole, Wise Guy and Rosie. Madonna Ciccone is a partner in Tadpole, Guy Oseary is the managing partner of Wise Guy, and Ronnie Dashev is the managing member of Rosie. The defendants are all Warner affiliates. The defendants have breached the Maverick joint venture agreement by failing to provide guaranteed promotion and marketing services, improperly calculating profitability, and using improper accounting methodology to create the false impression of losses when, in fact, there were profits. The venture incurred costs of more than $30 due to the failure to provide services. Warner also failed to negotiate competitive rates with subsidiaries for services such as manufacture of recordings.

RELIEF SOUGHT: More than $60 million.

PLAINTIFFS' COUNSEL: Bertram Fields, Lawrence Y. Iser and Kristen L. Spanier of Los Angeles' Greenberg Glusker Fields Claman Machtinger & Kinsella LLP (310-553-3610).

CASE CAPTION: Andrew Fessel v. American Broadcasting Companies Inc., The Walt Disney Co. and Alex Wallau, L.A. Superior Court # BC311959.

CAUSES OF ACTION: Breach of executive employment agreement; breach of implied covenant of good faith and fair dealing; wrongful termination in violation of public policy; and retaliation.

COMPLAINT ALLEGATIONS: Plaintiff Fessel entered into an employment agreement with ABC in 2002 to be Senior Vice President of Research. The agreement included a 2-year term with a 1-year option, $300,000 per year in wages, stock options in Disney, bonuses, an automobile allowance of $940 a month and other benefits. The plaintiff reported directly to defendant Wallau, the president of the ABC Television Network. The plaintiff was terminated “for cause” in August 2003, although defendants failed to state the reasons for the termination. This breached the employment contract's requirement that he be given 5 business days to cure any perceived breach upon notice. The plaintiff was fired only after he refused Wallau's directive to fire a male African-American and a woman, and for making complaints to Human Resources about Wallau's conduct.

RELIEF SOUGHT: At least $2.5 million.

PLAINTIFF'S COUNSEL: Patricio T. D. Barrera of Los Angeles' Marcin Barrera & O'Connor (310-286-1050).

CASE CAPTION: Uncensored Music Network Inc. v. Universal Music Group Inc. and DirecTV Inc., L.A. Superior Court # BC311759.

CAUSES OF ACTION: Misappropriation of trade secrets; false designation of origin; unfair competition; and interference with prospective economic advantage.

COMPLAINT ALLEGATIONS: The plaintiff was incorporated in August 2003 to develop the proprietary TV-marketing strategy it called “Uncensored Music Network” created by plaintiff's founders. It included a 24-hour-a-day cable network offering uncensored music videos provided to subscribers with a mission statement saying that it offered artists the ability to truly exercise their First Amendment right of free expression. The network was to be launched in July 2004. The plaintiff was seeking $49.75 million in financing and had obtained numerous expressions of interest. In September 2003, Rodney Kimbrew, the plaintiff's CEO, met with the Program Acquisition Group of DirecTV. In October 2003, Karin Richmond, the plaintiff's president, sent the plan to Steve Rifkind, the head of Street Records, a subsidiary of Universal Music. In January 2004, the Los Angeles Times ran a story reporting that Universal was having discussions with DirecTV about an uncensored, commercial-free premium music TV-channel to be called “1AM,” short for 1st Amendment, that could launch in July. Thereafter, the plaintiff's financial advisors informed the plaintiff that financing previously agreed-to would not be forthcoming unless the plaintiff got legal relief against the proposed channel.

RELIEF SOUGHT: Compensatory damages of $49.75 million in lost financing and $10 million a month in lost profits, plus an injunction against use of the plaintiff's trade secrets.

PLAINTIFF'S COUNSEL: Brian J. Jacobs of Sherman Oaks, CA (310-770-6874).

CASE CAPTION: NBC Studios Inc. (NBCS) as cross-complainant v. Jason Nidorf Mutchnik (aka Max Mutchnik), Too Mutch Ink, David Kohan and Ode Inc. as cross-defendants, L.A. Superior Court # BC307563.

CAUSES OF ACTION: Cross complaint for breach of contract, for breach of the covenant of good faith and fair dealing, and for fraud.

COMPLAINT ALLEGATIONS: The original complaint was filed by Mutchnik and Kohan, the producers of the TV series “Will & Grace” in December 2003. NBCS signed the producers to an “overall term deal” in the summer of 1996 to develop ideas for potential programming. The writers were guaranteed at least $8.5 million, whether they came up with any useable ideas or not. They came up with “Will & Grace” in collaboration with NBCS series development executives. NBCS aggressively promoted this groundbreaking series, despite enormous financial risks. The initial license fee from NBC did not cover all the production costs. Mutchnik and Kohan did not bear any risk. The parties understood that their agreement called for NBCS to negotiate license fees with NBC. Mutchnik and Kohan and “their handlers” were totally uncooperative in the licensing process, despite an agreement that they would aid in the negotiations. Mutchnik and Kohan hatched a plan driven by greed to squeeze every last dollar for themselves at the expense of NBCS and other contingent compensation participants. Mutchnik and Kohan decided to assert that no matter how much they got, they would claim the negotiations could have been conducted better to obtain higher fees and “they always secretly planned to sue NBCS.” In actuality, through NBCS' efforts, the show got put on the widely watched Thursday schedule, and Mutchnik and Kohan have been paid more than $20 million for their work on the series and are likely to get much more.

RELIEF SOUGHT: Unspecified damages.

PLAINTIFF'S COUNSEL: Henry Shields Jr., Richard de Bodo and Anne Hwang of Irell & Manella (310-277-1010).

CASE CAPTION: Maverick Records LLC, Tadpole Records L.P., Wise Guy LLC and Rosie Enterprises LLC v. SR/MDM Venture Inc., WBR/Sire Ventures, Inc., Warner Bros. Records Inc., Warner Music Group Inc. and Time Warner Inc ., L.A. Superior Court # BC312716.

CAUSES OF ACTION: Breach of joint venture agreement; breach of fiduciary duty; inducing breach; fraud; accounting; declaratory relief; and injunctive relief.

COMPLAINT ALLEGATIONS: Maverick Records is a partnership between the plaintiffs and Warner Bros. Records started with $10 million in 1993. Since then, Maverick has generated revenues of $900 million and profits of $100 million for the Warner Music Group. The plaintiffs have been attempting to settle disputes over accounting for months and told the defendants that they would file suit in California if they were not resolved. On March 24, 2004, while negotiations were still in progress, the defendants without warning filed a preemptive action in Delaware ' a blatant instance of forum shopping. Members of Maverick include Tadpole, Wise Guy and Rosie. Madonna Ciccone is a partner in Tadpole, Guy Oseary is the managing partner of Wise Guy, and Ronnie Dashev is the managing member of Rosie. The defendants are all Warner affiliates. The defendants have breached the Maverick joint venture agreement by failing to provide guaranteed promotion and marketing services, improperly calculating profitability, and using improper accounting methodology to create the false impression of losses when, in fact, there were profits. The venture incurred costs of more than $30 due to the failure to provide services. Warner also failed to negotiate competitive rates with subsidiaries for services such as manufacture of recordings.

RELIEF SOUGHT: More than $60 million.

PLAINTIFFS' COUNSEL: Bertram Fields, Lawrence Y. Iser and Kristen L. Spanier of Los Angeles' Greenberg Glusker Fields Claman Machtinger & Kinsella LLP (310-553-3610).

CASE CAPTION: Andrew Fessel v. American Broadcasting Companies Inc., The Walt Disney Co. and Alex Wallau, L.A. Superior Court # BC311959.

CAUSES OF ACTION: Breach of executive employment agreement; breach of implied covenant of good faith and fair dealing; wrongful termination in violation of public policy; and retaliation.

COMPLAINT ALLEGATIONS: Plaintiff Fessel entered into an employment agreement with ABC in 2002 to be Senior Vice President of Research. The agreement included a 2-year term with a 1-year option, $300,000 per year in wages, stock options in Disney, bonuses, an automobile allowance of $940 a month and other benefits. The plaintiff reported directly to defendant Wallau, the president of the ABC Television Network. The plaintiff was terminated “for cause” in August 2003, although defendants failed to state the reasons for the termination. This breached the employment contract's requirement that he be given 5 business days to cure any perceived breach upon notice. The plaintiff was fired only after he refused Wallau's directive to fire a male African-American and a woman, and for making complaints to Human Resources about Wallau's conduct.

RELIEF SOUGHT: At least $2.5 million.

PLAINTIFF'S COUNSEL: Patricio T. D. Barrera of Los Angeles' Marcin Barrera & O'Connor (310-286-1050).

CASE CAPTION: Uncensored Music Network Inc. v. Universal Music Group Inc. and DirecTV Inc., L.A. Superior Court # BC311759.

CAUSES OF ACTION: Misappropriation of trade secrets; false designation of origin; unfair competition; and interference with prospective economic advantage.

COMPLAINT ALLEGATIONS: The plaintiff was incorporated in August 2003 to develop the proprietary TV-marketing strategy it called “Uncensored Music Network” created by plaintiff's founders. It included a 24-hour-a-day cable network offering uncensored music videos provided to subscribers with a mission statement saying that it offered artists the ability to truly exercise their First Amendment right of free expression. The network was to be launched in July 2004. The plaintiff was seeking $49.75 million in financing and had obtained numerous expressions of interest. In September 2003, Rodney Kimbrew, the plaintiff's CEO, met with the Program Acquisition Group of DirecTV. In October 2003, Karin Richmond, the plaintiff's president, sent the plan to Steve Rifkind, the head of Street Records, a subsidiary of Universal Music. In January 2004, the Los Angeles Times ran a story reporting that Universal was having discussions with DirecTV about an uncensored, commercial-free premium music TV-channel to be called “1AM,” short for 1st Amendment, that could launch in July. Thereafter, the plaintiff's financial advisors informed the plaintiff that financing previously agreed-to would not be forthcoming unless the plaintiff got legal relief against the proposed channel.

RELIEF SOUGHT: Compensatory damages of $49.75 million in lost financing and $10 million a month in lost profits, plus an injunction against use of the plaintiff's trade secrets.

PLAINTIFF'S COUNSEL: Brian J. Jacobs of Sherman Oaks, CA (310-770-6874).

CASE CAPTION: NBC Studios Inc. (NBCS) as cross-complainant v. Jason Nidorf Mutchnik (aka Max Mutchnik), Too Mutch Ink, David Kohan and Ode Inc. as cross-defendants, L.A. Superior Court # BC307563.

CAUSES OF ACTION: Cross complaint for breach of contract, for breach of the covenant of good faith and fair dealing, and for fraud.

COMPLAINT ALLEGATIONS: The original complaint was filed by Mutchnik and Kohan, the producers of the TV series “Will & Grace” in December 2003. NBCS signed the producers to an “overall term deal” in the summer of 1996 to develop ideas for potential programming. The writers were guaranteed at least $8.5 million, whether they came up with any useable ideas or not. They came up with “Will & Grace” in collaboration with NBCS series development executives. NBCS aggressively promoted this groundbreaking series, despite enormous financial risks. The initial license fee from NBC did not cover all the production costs. Mutchnik and Kohan did not bear any risk. The parties understood that their agreement called for NBCS to negotiate license fees with NBC. Mutchnik and Kohan and “their handlers” were totally uncooperative in the licensing process, despite an agreement that they would aid in the negotiations. Mutchnik and Kohan hatched a plan driven by greed to squeeze every last dollar for themselves at the expense of NBCS and other contingent compensation participants. Mutchnik and Kohan decided to assert that no matter how much they got, they would claim the negotiations could have been conducted better to obtain higher fees and “they always secretly planned to sue NBCS.” In actuality, through NBCS' efforts, the show got put on the widely watched Thursday schedule, and Mutchnik and Kohan have been paid more than $20 million for their work on the series and are likely to get much more.

RELIEF SOUGHT: Unspecified damages.

PLAINTIFF'S COUNSEL: Henry Shields Jr., Richard de Bodo and Anne Hwang of Irell & Manella (310-277-1010).