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ANDREA
ANDREA, Lawyer
Category: Intellectual Property Law
Satisfied Customers: 11651
Experience:  25 Years Exp. LLM, Taxation
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Entertainment Law/Financing question Hello I am getting

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Entertainment Law/Financing question

Hello

I am getting ready to start the process of financing and production of a feature film that I wrote and I am going to direct. There is a financier/investor who has been promising me for a while that he wants to finance the project. My producer and I met with him two days ago and he said that he is on board and we can start hiring people for the production. He said he cannot give us all the money at once, but that he will roll it in during pre-production and eventually we will have what we need to shoot the film by the first day of the shoot (beginning of August). We agreed to start an LLC and he said that once the LLC is set up he will start putting money into its account so we can pay people (we have to start hiring already for work that needs to be done in pre-production).

For personal reasons, I have reason to believe that the investor might not give us the money at the dates he promised. He will probably give us some money in the beginning, but once we (the producer and I) are too involved to back out, he might stall things which would make it very dangerous for me (I have another job that I have to start practically the day after I wrap this shoot).

How can I protect myself and the producer, so that if the investor doesn't give us the money at the terms he verbally promised, we can walk away (and I can go do the other job) without being legally liable and without damaging our reputations? (as the investor never meets with any people we're hiring, it is our word and our reputation at risk whenever we make verbal offers to people)

thank you
Submitted: 1 year ago.
Category: Intellectual Property Law
Expert:  ANDREA replied 1 year ago.

Dear Ioanna, name is XXXXX XXXXX my goal is to provide you with Excellent Service,

 

 

1. Do you have a written Investment Agreement with this investor ?

 

 

2. If so, does the Agreement specify at what intervals the investor will make his deposits and in what amounts ?

 

 

3. What does the investor receive as a return on his investment ?

 

 

 

4. Does the Agreement address the issue of default by either party ?

 

 

 

Customer: replied 1 year ago.

hello Andrea. Thank you for your time.


 


1. No, I haven't signed any kind of papers with him so far. He said that I'll get paid for my screenwriting and directing work through the LLC once it's established.


 


3. The rights to the final product, and any profits that might come in. I assumed that this is supposed to be written into the LLC paperwork? or should I have some sort of investment agreement with him beforehand?


 


4. We haven't discussed that. Is that supposed to be spelled out in the LLC Operating agreement, or in a different legal document beforehand?

Expert:  ANDREA replied 1 year ago.

Hi, Ioana, Thank you for your additional information,

 

 

If you do not have anything in writing signed by you and the investor which sets forth the rights and obligations of the parties, there is no way that you can hold the investor liable for anything. And, the investor can back out of your verbal agreement at any time and argue that since there is nothing in writing there is no way he knew what his obligations were, at what intervals he was supposed to deposit his investment, what the return on his investment would be, how he would be paid, etc. Without a signed written Agreement with the investor, before production even starts, there is no way to protect yourself.

 

It appears that the project would be headed for disaster from the starting gate. Unless there is a written Agreement, there would be no way that you could even sue him for the money because a Judge would have no way of knowing what the rights and obligations of the parties were or whether either party was in breach of the Agreement.

 

You stated that the investor would have the rights to the finished production and all the profits therefrom. Maybe I am missing the point, but what would be the purpose of putting on a production, bearing all the responsibility and all the headaches, if you do not have the opportunity to share in the profits of its success. By giving this away to the investor, what are you left with in the end?

 

_______________________________________________________________________

 

 

Please be kind enough to rate "Excellent Service" so that I receive credit for assisting you,

 

Bonus and Positive Feedback on survey is very much appreciated,

 

ANDREA

 

 

 

Customer: replied 1 year ago.

thank you Andrea


 


just to answer your question, we haven't actually decided yet what the investor is supposed to get on his return. I just assumed that basically he is "buying" himself a film, the producer and I get paid a fee for the work and that's it.

Expert:  ANDREA replied 1 year ago.

You should never give away all the rights to a film, a play, or anything of artistic value. It is best to give only a percentage of the net profits, never the product itself. If it becomes absolutely necessary to give something of the product, always be sure that (1) it is a very small percentage, leaving you with at least 75% ownership and control; and (2) It should be in exchange for something else. Always hold more than just a 51% majority. Please be kind enough to rate my service as Excellent Service so that I can receive credit for assisting you, otherwise I will not receive credit for researching your question and furnishing you with Answers and information. Thank you for understanding,

 

___________________________________________________________________________

 

Dear Customer, My name is XXXXX XXXXX my goal is to provide you with Excellent Service,

 

I understand your concern and also understand your frustration. Many customers have come to JustAnswser with similar information, and many of these customers had already sent their hard-earned money to these people which turned out to be frauds and scam artists, so they had already lost their money and were looking for ways to get it back. That has proven to be a virtual impossibility.

 

The police would not be able to help you because they do not have the manpower, nor the technological resources to assist you. The people whom you should contact are those who investigate internet fraud schemes. The organization which investigates and prosecutes these frauds is made up of three government agencies, one of which is the Federal Bureau of Investigation (the "FBI"). They actually have lists of a list of Internet Fraud Schemes and describe how each one works,

 

 

http://www.ic3.gov/crimeschemes.aspx

 

 

You can contact them and file a formal Complaint by going to their Official website:

 

 

 

http://www.ic3.gov/default.aspx

 

 

I wish I could tell you that these people are real and they are not frauds and this is an opportunity to make a lot of money, but I have an ethical obligation to you to give only correct Answers and information, so IU am kindly requesting that you try not to hold this against me when rating my service to you,

 

______________________________________________________________________________

 


Please be kind enough to rate "Excellent Service" so that I receive credit for assisting you,

 

Bonus and Positive Feedback on survey is very much appreciated,

 

ANDREA

 

 

 

 

ANDREA, Lawyer
Satisfied Customers: 11651
Experience: 25 Years Exp. LLM, Taxation
ANDREA and other Intellectual Property Law Specialists are ready to help you
Expert:  ANDREA replied 1 year ago.

Hi, Ioana,

 

Thank you for the Excellent Service rating and the Bonus, I appreciate it greatly. I must apologize for the overlap in Answers. The site is experiencing some technical difficulties and a lot of strange things have been happening. So, again, I apologize,

 

 

ANDREA

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