LOS ANGELES – August 17, 2009 – In a lawsuit filed in Superior Court here today, The Halcyon Company, which owns the rights to the Terminator movie franchise, accused a former employee of a Santa Barbara hedge fund of fraud and double-dealing, and of conspiring with the fund’s current CEO in a scheme to line their own pockets at Halcyon’s expense.
In a second suit also filed today, Dominion Group, LLC, which is owned by Halcyon principals Derek Anderson and Victor Kubicek, accused Pacificor of wrongfully filing a lien on certain of Dominion’s assets in order to block it from obtaining vitally-needed financing for Halcyon.
The two lawsuits each seek upwards of $30 million in damages from Santa Barbara-based Pacificor, LLC, and former Pacificor employee Kurt Benjamin. The Benjamin suit alleges that current Pacificor CEO Andy Mitchell conspired with Benjamin to take actions that represented not only a betrayal of Halcyon, but were also a breach of Pacificor’s fiduciary duties to its own investors.
Pacificor originally provided the financing for Halcyon’s acquisition of the motion picture and related rights to the Terminator franchise in May, 2007. Following its acquisition of the rights, Halcyon produced Terminator Salvation, the fourth movie in the Terminator series, which was released earlier this year.
According to the lawsuit against Benjamin, when Benjamin introduced Halcyon principals Anderson and Kubicek to potential financier Pacificor in early 2007, he presented himself as an independent contractor acting on Halcyon’s behalf. In fact, the lawsuit alleges, Benjamin was an employee of Pacificor at the time. Moreover, it says, not only did he not reveal to Halcyon that he was a Pacificor employee, he also did not reveal to Pacificor that he was being separately compensated by Halcyon for arranging the deal.
The Benjamin lawsuit outlines a scheme in which Mitchell and Benjamin took advantage of their knowledge of Halcyon’s confidential business information to manipulate the company into a position where they could threaten to ruin it if their demands for personal under-the-table compensation were not met.
Among other things, the Halcyon complaint against Benjamin accuses him of:
• Forcing Halcyon to pay him $500,000, plus 1.5% of its proceeds from the Terminator franchise for arranging the Pacificor financing deal, while keeping secret from Halcyon his relationship to Pacificor.
• Improperly revealing Halcyon’s trade secrets and confidential business information to Pacificor, so that Pacificor could obtain leverage in negotiating various loan agreements with Halcyon.
• Extorting a monthly salary from Halcyon by threatening to “kill” Halcyon’s various deals with Pacificor.
• Forcing Halcyon to obtain financing exclusively from Pacificor, rather than attempting to find other potential investors, in order to ensure that Pacificor could maintain control over Halcyon.
The complaint against Benjamin also alleges that Benjamin and Mitchell were offered bribes by potential buyers of the Terminator franchise. According to the complaint, “Benjamin, Mitchell, and Pacificor planned on taking the bribes, foreclosing on the Franchise and selling it to the potential buyers even though it likely was a breach of fiduciary duties to Pacificor’s investors.”
The suit against Pacificor alleges that Pacificor wrongfully sought to block Dominion from obtaining vitally-needed financing for Halcyon, by illegally filing a lien against Dominion assets in which Pacificor had not been granted any security interest or other rights.
'TERMINATOR' DRAMA: Producers Accuse Hedge Fund Of Extortion, Bribery, Fraud; Lawsuit Seeks $30M In Damages
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