Risk Update

Conflicts Contentions — Furious Conflicts Allegation on Film, CBD Clash Not Chill

Posted Dan Bressler

“L.A. Firm, Attorney Subject of Malpractice, Breach of Fiduciary Duty Suit for ‘King Fury 2’ Movie” —

  • “A film production company is seeking over $60 million in damages and alleges a Los Angeles law firm and its attorney committed legal malpractice and breached their fiduciary duty while involved in an overseas film production.”
  • “Shanghai-based Creasun Entertainment USA Inc., filed suit against Loeb & Loeb and attorney, Michael Helfant, who is of counsel to the firm, in Los Angeles County Superior Court last week. Creasun claims the defendants failed to diligently represent its interests when the company retained the firm and Helfant to negotiate its financing for the film ‘King Fury 2,’ set to star Arnold Schwarzenegger and Michael Fassbender, among others.”
  • “Creasun became involved with the production after film producer Alex Lebovici approached Minglu Ma, the company’s chairman, about an investment opportunity in the film. The suit claims Lebovici and the defendants also ‘secretly developed an attorney-client relationship’ which created a conflict of interest when they represented Creasun in negotiations with Lebovici and his business partners.”
  • “When Ma visited Bulgaria for the movie’s production, she claims she learned of alleged fraudulent activity with the film’s budget. Despite only investing $3 million at the time, the film had over $4 million in its account, and producers told Ma it ‘was a simple accounting error,’ the complaint said.”
  • “Creasun’s denied access to real time bank statements for the movie production led it to attempt to obtain an audit of the film’s finances, but the company learned there was no contractual mechanism to enforce its right to access the records, the complaint said.”
  • “After Creasun refused to put more money into the film’s production and faced pressure from Helfant to continue its investment, Creasun and Ma were then sued in a civil action for damages by a German producer. Creasun then filed a cross-complaint against the German producer, Lebovici, and others which resulted in considerable attorney fees as a consequence of negligent legal services from the defendants, the complaint said.”

“Investor Wants Fla. CBD Co.’s Atty DQ’d In Fraud Suit” —

  • “An investor in a Florida health goods company asked a federal judge Wednesday to disqualify an attorney from representing a company principal, saying the attorney should instead testify at trial because he knows about relevant contract negotiations.”
  • “Aaron Silberman and his investment firm AMJ Misil AB LLC submitted a motion to disqualify attorney Felipe Rubio from representing defendant Florencia Hane after he failed to appear on her behalf just two weeks before trial. Silberman included Rubio in his witness list for trial because defendants shared his name in an initial disclosure document, saying he had knowledge regarding Silberman’s fraud claims and the drafting of a membership interest purchase agreement in question.”
  • “‘Defendants may not now withhold this evidence at trial under the pretense of attorney-client privilege,’ Silberman argued, adding, ‘here, defendants, the holders of any attorney-client privilege between them and attorney Rubio, have put attorney Rubio’s knowledge at issue as discoverable information through their Rule 26 initial disclosures, thereby waiving the attorney-client privilege as to all related privileged matters on the same subject.'”
  • “In his suit filed in May 2020, Silberman claims he was lied to about Premier Beauty and Health LLC’s CBD products and prospects when its principals, Florencia Hane and Silberman’s uncle Jorge Hane, courted him for his investment and promised him a job.”
  • “Based on the record of evidence, Silberman believed Rubio would testify that he first drafted a member interest purchase agreement between Premier and AMJ that would have allowed Florencia Hane to deposit $100,000 of the investment funds in an account of her choice, according to his memorandum.”
  • “‘Plaintiff AMJ never agreed to that and never signed that initial membership interest purchase agreement drafted by attorney Rubio, but defendant Florencia proceeded to transfer … $100,000.00 of plaintiff AMJ’s investment funds to ‘an account of her choice’ anyway, thereby misappropriating … AMJ’s investment funds,’ Silberman said.”
  • “Because Rubio’s testimony at trial would be adverse to Florencia Hane, Silberman said his disqualification as her counsel is necessary.”
  • “‘Indeed, attorney Rubio’s testimony will, among other things, be adverse to defendant Florencia’s claims that … she did not misappropriate plaintiff AMJ’s investment funds. Consequently, plaintiffs respectfully request that this honorable court disqualify attorney Rubio as defendant Florencia’s counsel,’ Silberman said.”