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Some interesting news here. Elias vs Mallick.
A legit lawsuit or a clever legal strategy? The charge was Contract Fraud, a little bird informed me that Chris Mallick gave up a confession judgment without dispute.
Read on...
Lender Says Movie Producer Lied About $15M Loan
By Django Gold
Law360, New York (October 03, 2011, 1:00 PM ET) -- A film producer and owner of an electronic funds transfer service was sued Thursday in California by a onetime business associate who claims his former friend failed to pay back a $15 million loan after blowing the money on a botched film project.
Trust company Fire Glow Holding Inc.'s managing director, Greg Elias, alleges Christopher Mallick lied about the purpose of the loan and the value of his own holdings, including defunct electronic transfer company E Passport.
?Mallick's representations regarding his net worth, the purpose of the loan, the value of E Passport and the proposed sale thereof were false when made, and were made with the intent to deceive Fire Glow and induce it to make the loan,? the complaint said.
Mallick solicited the loan from Elias, saying that he needed the money to pay off a divorce settlement with his ex-wife, according to the complaint.
The defendant said he would give Elias a cut of E Passport's cashflow while the loan remained outstanding, and that the potential sale of the company ? which Mallick claimed had been valued by a potential buyer at $80 million ? would cover Mallick's debt, Elias alleges.
But the plaintiff says media reports in September 2010 showed that Visa Inc. had severed its relationship with E Passport, with Mallick's company dissolving the next month.
Upon conducting an investigation into Mallick's affairs, Elias learned in January 2011 that Mallick had actually settled his divorce for $6.1 million, according to the complaint.
?Mallick used the loan proceeds or most of them for purposes other than the [divorce settlement] including investments in risky movie productions, and had the intent to do so at the time he negotiated the loan,? the suit said.
Mallick produced the feature film ?Middle Men,? which was released in the U.S. in August 2010. The film, based on Mallick's experiences, earned approximately $750,000 at the box office despite a budget of $20 million, according to boxofficemojo.com.
Though Mallick did make a partial payment of $3 million to Fire Glow in August 2008, he has indicated he would be unable to pay back the remaining balance, according to the suit.
?As a direct and proximate cause of Mallick's false representations, Fire Glow now holds a worthless loan with a balance due of $12 million from an obliger who claims to have no ability to repay the loan,? the complaint said.
The terms of the loan were established in May 2008 on the island of Curacao, a Caribbean island that is part of the Netherlands, the suit says. The plaintiff seeks a judgment of fraud and breach of contract under the laws of Curacao.
Representatives for the parties were not immediately available for comment Monday.
Fire Glow is represented by Aalok Sharma and Charles C. Kline of White & Case LLP.
Counsel information for Mallick was not immediately available.
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