LOS ANGELES (CN) - For the second time in a month, Bret Saxon and his Insomnia Media Group have been sued in Superior Court, accused of playing fast and loose with the truth. Borak Capital Holding claims Saxon committed trade libel in a press release that claimed, falsely, that it was investing $550 million in Saxon's Insomnia Media Group.
Saxon was sued
in early March by two men who claimed that Saxon and Insomnia took them for $1 million to produce movies that were never filmed, including one that Saxon claimed, falsely, would be produced by Robert DeNiro. DeNiro was not a party to that complaint.
In the new lawsuit, Borak, of Egypt, claims Saxon issued a press release that stated, falsely, that it had invested $550 million in Insomnia and was collaborating on a "$70 million war epic being shot in Egypt, Morocco and Los Angeles." The press release was printed as truth by trade papers, including Reuters and Variety, according to the complaint.
Borak says it never provided financial backing and the "nonexistent transactions" were part of a Ponzi scheme by Saxon and Insomnia to get more money from investors.
"None of the statements in defendants' press release, and subsequent news stories, were true," Borak says in its complaint. "In particular, plaintiff never agreed to provide defendants with $550,000,000 or with any other sum. Plaintiff has also not worked with defendants for '12 years outside the entertainment sector on real estate and energy deals.' Indeed, plaintiff did not exist 12 years ago," the complaint states.
It continues: "In or about January 2011, plaintiff has learned that these false statements about plaintiff and the nonexistent transactions with plaintiff were made by defendants in order to enhance their reputation in the entertainment industry and to perpetrate a Ponzi scheme, whereby they would solicit funds from various investors for entertainment projects which either did not exist or which would be produced for the fraction of the funds raised by defendants, with the balance diverted to defendants' personal use. Defendants' misrepresentations concerning their financial backing by Borak Capital Holdings were a material element in inducing other investors to invest or loan money to defendants."
Borak claims that Saxon issued, or caused to be issued, this Nov. 27, 2007 press release, which the complaint attributes to Reuters news service:
"Entertainment company Insomnia Media Group said on Tuesday it is receiving a $550 million cash infusion from Egypt-based Borak Holding, the latest in a growing list of Hollywood companies to obtain Middle East funding.
"Under terms of the deal, Insomnia, an independent television and film and talent services company founded in 1994 by Bret Saxon and Jeff Bowler, will retain majority ownership and use the money for acquisitions and additional film projects.
"Asset management firm Borak joins an expanding group of companies from the region who are financing Hollywood as U.S. private equity investors, who have pumped an estimated $10 billion into the industry in the last three years have grown more skittish.
"'With oil now at about $98 a barrel, the money from that region is creating enterprise for everything from real estate to entertainment,' said Insomnia's Saxon, who also serves as chairman of Transactional Marketing Partners, a marketing consultancy, in an interview.
"Insomnia and Borak are currently collaborating on an untitled $70 million war epic being shot in Egypt, Morocco and Los Angeles.
"Saxon has worked with Borak for 12 years outside the entertainment sector on real estate and energy deals. 'Now, they're looking for more interesting places to put their money,' he said, adding foreign investors were more attractive in some ways than U.S. investors in Hollywood.
"'These investors are more aggressive and easier to deal with,' he said, noting U.S. bankers typically require specific kinds of distribution deals and stars attached up front before committing to film and TV projects."
Borak says Saxon used the bogus "cash infusion" to get financing and production deals with major studios and "to raise monies from unsuspecting investors on movie projects that did not exist."
"Plaintiff is informed and believes and based thereon alleges that such false statements and material misrepresentations concerning plaintiff's purported investment of $550,000,000 in defendants' film company were made, among others, to: Mark Shmuger (Chairman, Universal Pictures); Graham Taylor (President, William Morris-Endeavor); Kirk Shaw (CEO, Insight Studios); Brett Ratner (Director - President, RAT Entertainment); Shawn Williamson (Co-chairman, Bright Light Pictures); and Peter Block (then-President of Acquisitions and Production, Lionsgate Films)," according to the complaint.
The complaint states, in language similar to the first lawsuit, that Saxon used his "decadent lifestyle," including a Pacific Palisades mansion and private jets, to "project an aura of success and financial solvency."
Borak says its business interests and reputation have been permanently harmed by its alleged association with Saxon and Insomnia's "fraudulent activities."
"Defendants' false publications have caused, and continue to cause, plaintiff to suffer obloquy, ridicule, and hatred from those who heard and read the statements, and have harmed plaintiffs reputation in the international business community," the complaint states.
Borak seeks at least $5 million in damages for trade libel, unfair competition and false designation of origin.
Also named as defendants are IMG Firm and IMG Film 14. Borak is represented by Michael Baranov with Baranov & Wittenberg