Bit Parts

The California Court of Appeal, Fourth District, decided that a guarantor for a loan to help finance a Great Wall of China rock concert was obligated to repay the financier who made the loan. Stewart v. Joyce & Associates Inc., G039871. Plaintiff John Stewart had loaned promoter Doc Brown Productions $250,000. Stewart later obtained a default judgment against Doc Brown, but the lower court ruled for loan guarantor Joyce & Associates on the ground that the concert hadn't earned any gross revenue. Reversing and remanding, the court of appeal noted in an unpublished opinion: “While Stewart failed to provide any evidence with regard to the amounts of money, if any, generated from DVD or pay-per-view sales [of the China concert], he provided evidence to show that the filmed footage of the concert and all of its sound recordings were sold for $1,964,117.80. This one sale alone was enough to demonstrate that the concert had generated 'gross revenue' within the meaning of the financier agreement. ' Here, Doc Brown sold what would appear to have been all of the concert-related assets in exchange for substantial consideration-or revenue-to the tune of $1,964,117.80. It would appear to have retained no concert-related assets that had the capacity to generate any other revenue later on. Joyce would have us believe that once Doc Brown so disposed of all the revenue-generating assets, by the simple expedient of accepting [an unsecured promissory] note instead of cash, Stewart never needed to be paid back. Not so fast.”