UPDATED, 8:20 PM: Just hours after James Franco’s former management company sued the actor’s ex-rep and his ex-financial adviser for fraud and a litany of other claims, Tanner Mainstain Blatt Glynn & Johnson LLP has fired back with a counterclaim. “JLM, the management company, was rife with internal mismanagement, surreptitious behavior, duplicitousness and questionable ethical acts,” the Hollywood financial management company said in its 7-page filing today in LA Superior Court. “By its Complaint, the management company and its owners seek to make TMBGJ responsible for their own myriad internal shortcomings.” The counterclaim alleges that in desperation to keep The Planet Of The Apes actor as a client, JLM partner and co-founder Randy James looked the other way at his former partner Miles Levy’s supposed skimming of a third of Franco’s commissions from 2006 to late 2013 as well as other indiscretions.
The lawyers for James and fellow plaintiff and former JLM director Ken Jacobson isn’t buying the spirit or the letter of the counterclaim. “This is no defense to the complaint’s allegations that Tanner Mainstain name partner Steve Blatt knowingly facilitated, concealed and profited from Mr. Levy’s theft from the corporation,” plaintiffs’ primary attorney Devin McRae said in a statement after the counterclaim was filed today. “The law doesn’t allow fraudsters to point to the victim and say, ‘It’s your fault I duped you’. This pleading will be shut down quickly.” TMBGJ is represented by attorney Randall Dean of LA film Chapman Glucksman Dean Roeb & Barger.
PREVIOUSLY, 1:06 PM: Last fall my colleague Mike Fleming Jr reported that James Franco and Miles Levy, his manager of almost two decades, had parted ways. Today, according to a multi-claim complaint (read it here) filed in LA Superior Court, we might have a sense of what really happened. “Box office star James Franco’s recently fired talent and financial managers, Defendants Miles Levy and Steve Blatt, conspired to, and did by fraudulent means, embezzle significant sums in commissions due James Levy Management for nearly a decade,” says the filing for a jury trial. It adds dramatically: “The thieves have been caught and the day of reckoning has arrived.”
Levy is said to have been skimming a third of the 15% Franco has been paying in commissions to the Burbank-based management company since 2006. Alleging breach of contract, fraud and unjust enrichment among other claims, James Levy Management co-founder Randy James and former company director Ken Jacobson have gone after Levy plus big-time Hollywood financial management firm Tanner Mainstain Blatt Glynn & Johnson LLP and partner Blatt for unspecified compensatory, exemplary and punitive damages. They also want an independent accounting, a court declaration of their rights, and an order “removing Levy from office.” The plaintiffs say they discovered this case of sticky fingers on March 20, 2014 and that is why they have brought this legal action now. Obviously, the 50-year friendship and 28-year business partnership between James and Levy has hit a bit of a rocky period to put it mildly.
Essentially, the complaint alleges that the “overcome by greed and other character flaws,” Levy told James and Jacobson in May 2006 that Franco would only be paying 10% commissions, not the previously agreed-upon 15%. The duo accepted this not realizing it was a sleight of hand to push that 5% to a company set up by Levy and Blatt, then Franco’s financial manager. Franco didn’t know either. What the star of Spring Breakers — on which Levy had a producing credit among many Franco films — did discover is that the talent manager was using Franco’s credit cards for “substantial sums” for personal use. The charges were paid from the actor’s money.
It was this discovery that led to Franco cutting both Levy and Blatt loose last year and going without management — a big loss to James Levy. In a December 20, 2013 settlement agreement Levy supposedly kept from his partner James, the manager arranged to have the remaining charges paid out of JLM commissions and not his lifted 5%. Today’s filing says this settlement agreement was how Franco discovered JLM was getting a 10% commission and not the 15% he thought he was paying them. Franco continues to be repped by CAA on the agency front.
The plaintiffs are repped by Devin McRae and Michael Jones of LA firm Early Sullivan Wright Gizer & McRae LLP.