Archive for February, 2008

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Steven Beer, Esq., Greenberg Traurig

February 8, 2008

 

Steven C. Beer, Esq.

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STEVEN BEER, ESQ. ADVOCATES INNOVATIVE IDEAS AND NEW VOICES!!!!

Mychal: Hello Counselor. I hope you are well. Thank you for coming aboard! Wow, here we are, two lawyers collaborating and as opposed to being adversarial. Who knows, maybe the Writers (WGA) strike will soon end? So, as a shareholder attorney for Greenberg Traurig (“GT”), can you give us a little background? And, your responsibilities as a GT shareholder?

Steven: Hello Mychal! Yes, I was a founding partner of Rudolph & Beer, LLP, a top entertainment and media law firm. In 2003, Larry Rudolph quit practicing law and became Britney Spears’ manager. Then, Greenberg Traurig contacted me to join their international Film and Television practice. Similar to a partner, I attend to the business of current GT clients and develop new business opportunities for our clients GT fosters an entrepreneurial spirit that speaks to the innovative lawyer and makes GT unique. Of course, I also supervise our junior lawyers and participate in facilitating the smooth operation of our firm.

Mychal: And, can you please tell us a little about Greenberg Traurig?

Steven: Yes, Greenberg Traurig, LLP is an international, full-service law firm with 1,750 attorneys and governmental affairs professionals in the U.S., Europe and Asia. The firm is ranked seventh on The American Lawyer’s Am Law 100 listing of the largest law firms in the U.S., based on number of lawyers. The firm was selected as the 2007 USA Law Firm of the Year by Chambers and Partners.

Mychal: Impressive! When Paul and I started MindFusion Law Corp., we built it for the future. Over the past few years, how has the practice of entertainment law changed?

Steven: The practice of entertainment law has dramatically changed. There is the constant change in technology and the market place especially in the film industry, where there are new film financing structures and new distribution avenues of film product. So, the practice of law has to accommodate the market or your practice will be left behind. Also, clients are much more demanding of counsel. Meaning, they demand market solutions and not just your advice and counseling on the state of the law.

Mychal: Great! We just teamed up and worked together for our client’s (writer/director Dennis Dortch) 2008 Sundance film “A Good Day To Be Black & Sexy.” Can you give us a brief Sundance wrap-regarding film sales? Although Sundance is titled a film market, how was the film buying this year?

Steven: I thought the market place around the Sundance festival was robust and active. More so, than in recent years. The Distributors were more savvy in asking sellers for guidance this year. There were less adversarial positions and there was more collaboration between the buyer and seller. I also saw greater attendance for the initial film screenings which occur in the first few days of the festival.

Mychal: Do you think the WGA strike or the recession played any role on the film market surrounding Sundance?

Steven: I think the strike played a role in the buying of film product. But, also there is the expensive nature of production as a whole. Nowadays, it is becoming more economically efficient to acquire films, especially when films appear in an elite festival as opposed to the expensive and painstaking process of developing, financing and packaging film product.

Mychal: Because there has been so much money (i.e.-private equity, Hedge Funds, etc.) out there to produce films, some industry insiders state that there is too much supply in the market place. Do you agree?

Steven: I understand their position, and let’s also acknowledge that cheaper and more accessible technology provides filmmakers with more opportunity to make films. But, even if there is a glut of content in the marketplace, it’s important to encourage these artists to articulate their thoughts through film. Honestly, there is no telling what we can learn when voices are heard. I welcome the new wave of voices such as Dennis Dortch’s and his film “ A Good Day To Be Black & Sexy” (“GDBS”). It is great to find a film like GDBS. Dennis’ film is like finding an oasis in the desert! I think all these films have some merit which is great!

Mychal: What about the near future? The SAG collective bargaining agreement is up for negotiation mid-year, and consumer spending is down. How does this affect film distribution regarding Theatrical, DVD, VOD and Digital distribution?

Steven: I think the market place will continue to be polarized. Independent films will find homes and continue to grow the alternative markets for distribution especially in the areas where the costs of media increases.

Mychal: Have you noticed a change in business in the major markets such as Cannes, AFM, MIPCOM, NATPE, Berlin, etc?

Steven: Yes, I believe the buyers are more selective. Meaning, they are more focused on genre films with recognizable names attached. There are definitely fewer films that are returning the big numbers.

Mychal: Interestingly, that appears to be a common opinion. In a recent interview with Blue Rider’s CFO Jeff Geoffray, he voiced a similar opinion. Have you recently participated in any innovating deals? If so, can you disclose any interesting deal points?

Steven: Yes, I am excited about working with an automobile brand that partially finances film production and film P & A (Prints and Advertisement). In today’s market place, there is a bigger role for brands in the marketing aspects of Indie films, especially Indie films that have non-theatrical tours, informational and experimental events. So, yes, I am involved in a exciting and innovative deal known as the Chrysler Film Project!

Mychal: Sounds great! What is your opinion about monetization in the Digital Market place?

Steven: I think it’s a great incubator for independent films. The Digital Market Place is continuing to develop at a fast pace and will become a productive revenue stream in the near future.

Mychal: What about emerging markets in areas such as China? Currently, there is a lot of foreign interest and investment in China but intellectual property (IP) protection is a major obstacle. Do you see this obstacle being effectively addressed by the studios and independents in the very near future?

Steven: Well, it is not a question of ‘When’, but ‘How long?’ Essentially, developing countries such as China need an infrastructure to be built for IP protection to effectively take place. Of course, this includes an acclimation process where mainstream ideas and voices will not offend the cultures of developing countries.

Mychal: OK…so, then how feasible is it for potential clients to approach you? Do you have to be a proven talent or can you also be a newcomer?

Steven: Well, Dennis is a great example of the type of clients that we are looking for. We are gratified by discovering new and exciting voices, especially the stories that come out of nowhere! I love to facilitate the distribution avenues for new voices to be heard!

Mychal: Can you tell us an anonymous production nightmare involving talent, writer, director or producer?

Steven: Yes, I have my own personal nightmare which has turned into a great lesson for repping actors! As a courtesy to writer/director James Toback (“Bugsy” / “Black and White”), I agreed to appear as a lawyer for the rap group (Wu Tang Clan) in his film “Black and White.” Although I had pledged never to get in front of the camera again, Toback was very convincing. So, I waived my SAG (“Screen Actors Guild”) card and got in front of the camera. However, the post-production supervisor dubbed my voice! A very visible mistake because I sound like a zombie! Just awful! The film airs on cable, so, I cringe every time I hear my voice!

Mychal: Too funny….it appears you and I have had similar experiences! Sounds great! Ok, wrapping up. Last Question. What separates your practice from other entertainment law firms?

Steven: Greenberg Traurig is unique because our entertainment law practice is like a boutique firm but within a large firm practice. We have attorneys experienced in virtually every aspect of entertainment law all under one roof. We have attorneys who handle the full range of legal services including tax, corporate, labor/employment, intellectual property and technology. As a one-stop shop, we have wonderful colleagues and collaborators. Every day is a great adventure!

THE END

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Seven Building Blocks of DIY Film Distribution

February 8, 2008

Peter Broderick has published an article in “Documentary” magazine outlining new film distribution opportunities and seven things every filmmaker should do to maximize distribution. Read the article HERE.

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ARTICLE: PIERCING THE CORPORATE VEIL

February 6, 2008

Piercing the Corporate Veil

Paul Battista, Esq.

Many advantages can be elicited by the creation of an entity through which a business is conducted.  One of the most attractive features of an entity such as a corporation or a limited liability company is that the owners of the entities are protected from personal liability for the debts, obligations or liabilities of a business.  In general, the owner’s liability is limited to the amount they invested in the entity.   However, this protection is limited by the right of creditors to sue the owners by claiming that these individuals should be held personally liable for a judgment obtained against the entity.  Commonly referred to as the “piercing the corporate veil” or “alter ego” theory, it is widely believed to be the most litigated issue in corporate law.  Most alter ego claims arise from transactions between private parties, but the government can also utilize the doctrine.  For example, the Internal Revenue Service pursues “alter ego liens” because a federal tax lien can attach to all property, and rights to property, of a taxpayer.

In California, a member of a limited liability company shall be subject to liability under the common law governing alter ego liability, and shall also be personally liable …for any debt, obligation, or liability of the limited liability company, whether that liability or obligation arises in contract, tort or otherwise, under the same or similar circumstances and to the same extent as a shareholder of a corporation may be personally liable for any debt, obligation or liability of the corporation.  Beverly-Killea Limited Liability Company Act, section 17101 (b).

Regardless of which type of entity is pursued (corporation or limited liability company), the general rules governing the application of this doctrine are well established in California.  There are two elements that an alter ego plaintiff must prove:

1)      That “there is such a unity of interest between the entity and another person or entity that they have no separate existence”;  and

2)      That an inequitable result would follow if the entity alone is held liable for the contract or tort.

In discussing the doctrine of alter ego, the California Supreme Court has held that “there is no litmus test to determine when the corporate veil will be pierced; rather, the result will depend on the circumstances of each case.” (Mesler v. Bragg Management Co., 39 Cal 3d 290, 216 Cal Rptr. 443 (485).

A review of the cases which have discussed the alter ego issues reveals that the court will consider a variety of factors in making its decision.  Those factors include, but are not limited to, the following:

(a) Commingling of funds and other assets;

(b) Failure to segregate funds of separate entities;

(c) Unauthorized diversion of entity funds or assets to other than the entity’s uses;

(d) The treatment by an individual of the assets of the entity as his or her own;

(e) The failure to obtain authority to issue stock or membership interests;

(f) The failure to maintain adequate entity records;

(g) The use of the same office or business location for two or more entities;

(h) The employment of the same employees for two or more entities;

(i) The failure to adequately capitalize an entity;

(j) The total absence of entity assets;

(k) The use of the entity as a mere shell, instrumentality or conduit;

(l) The disregard of legal formalities;

(m) The failure to maintain arm’s length relationship among related entities; and,

(n) The contracting with another to avoid performance by using the entity against personal liability (i.e. as subterfuge).

The court, in Associated Vendors v. Oakland Meat Co., Inc. (210 Cal.App.2d. 825, 840), stated that it is important to note that a “perusal of the cases reveals that in all instances several of the factors (are) present.”  Although a court will examine all of the factors in an alter ego claim, in California the factor most often found as the key factor in piercing the corporate veil is the undercapitalization of a company.  Undercapitalization can be obvious when, for example, a company holds no capital upon formation and continues to have no capital during the time it is conducting business. The courts will, however, also review the amount of capital a company holds in relation to the business of the company.  The theory underlying this inquiry is that the owners of a company should in good faith put at risk the amount of capital necessary to meet prospective liabilities of its endeavors, and if the court finds that the amount of capital contributed by the owners is illusory or trifling compared with the business to be done and the risk of loss, then it will find grounds to pierce the corporate veil and hold the owners personally liable for a judgment.

Limited liability protection provided by entities such as corporations and limited liability companies has been cited as essential for the growth of the economy because it allows owners to engage in economic risks that are quantifiable and circumscribed. The doctrine of piercing the corporate veil, however, attaches personal liability to the owners of these entities under certain circumstances, and has been created by the courts as an equitable remedy to counterbalance the relatively few individuals who subvert the advantages of limited liability to evade rightful creditors, to perpetrate frauds or to promote injustices.

Legal Disclaimer: The information contained herein is general in nature. It is for informational purposes only and provides an overview of a few legal principles. The information provided is not guaranteed to be up to date or correct. The information contained in this blawg is not, nor is it intended to be, legal advice. It should not be relied upon in making specific legal decisions, but you should consult an attorney regarding your specific situation. Receiving this transmission and/or reading the information in this transmission does not establish an attorney-client relationship. A written, signed retainer agreement is required for representation.