United States of America v. "The Wolf of Wall Street" Motion Picture

Filing 143

CONSENT JUDGMENT OF FORFEITURE by Judge Dale S. Fischer Related to: Stipulation for Judgment 142 . ( MD JS-6. Case Terminated ) (twdb)

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1 2 3 JS-6 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE CENTRAL DISTRICT OF CALIFORNIA 10 UNITED STATES OF AMERICA, 11 NO. CV 16-5362-DSF (PLAx) * NO. CV 17-4439-DSF (PLAx) Plaintiff, 12 v. 13 14 15 CONSENT JUDGMENT OF FORFEITURE “THE WOLF OF WALL STREET” MOTION PICTURE, ETC., Defendant. 16 17 18 19 20 21 UNITED STATES OF AMERICA, Plaintiff, v. “DADDY’S HOME” AND “DUMB AND DUMBER TO” MOTION PICTURES, ETC., 22 23 24 Defendants. On July 20, 2016, Plaintiff United States of America 25 (“Plaintiff,” the “United States,” or the “Government”) commenced 26 case number CV 16-5362-DSF (PLAx), and notice was given and published 27 in accordance with law. 28 first amended complaint, and notice was given in accordance with law. On August 4, 2017, the Government filed a 1 On September 9, 2016, Claimants Red Granite Pictures, Inc.; Red 2 Granite Capital, Ltd.; Red Granite Capital US, LLC; TWOWS, LLC; and 3 Red Granite International, Inc. (collectively, the “Red Granite 4 Claimants”) filed claims to the original Complaint as to the 5 defendant asset any and all rights, presently-held and future, for 6 the motion picture “The Wolf of Wall Street” belonging to Red Granite 7 Pictures, Inc. (“Red Granite Pictures”), a film production company 8 located in Los Angeles, California, including copyright and 9 intellectual property rights, as well as the right to collect and 10 receive any revenue or receipts (whether gross or net), royalties, 11 and/or other proceeds resulting from the ownership by or interest of 12 Red Granite Pictures in connection with the role of Red Granite 13 Pictures in producing, distributing, or otherwise financing or 14 promoting the motion picture “The Wolf of Wall Street,” as well as 15 any and all monies received or held by Red Granite Pictures, whether 16 as cash or held in any account in any financial institution, that 17 constitutes any and all proceeds, to include but not limited to any 18 revenue or receipts (whether gross or net), royalties, and/or other 19 proceeds resulting from the ownership by or interest of Red Granite 20 Pictures, whether in whole or part, in connection with the role of 21 Red Granite Pictures in producing, distributing, or otherwise 22 financing or promoting the motion picture “The Wolf of Wall Street,” 23 or related to or derived from same (hereinafter “TWOWS,” as more 24 specifically described in Attachment A to the original Complaint in 25 case number CV 16-5362-DSF (PLAx)). 26 Directors Guild of America, Inc., Screen Actors Guild-American 27 Federation of Television and Radio Artists, Writers Guild of America 28 West, Inc., and Motion Picture Industry Pension and Health Plans 2 On October 7, 2016, Claimants 1 (collectively, the “Union Entities,” and with the Red Granite 2 Claimants, the “Claimants”) filed claims to the original Complaint as 3 to TWOWS. 4 for filing such claims and answers has expired. 5 have filed claims to the First Amended Complaint in case number CV 6 16-5362-DSF (PLAx) if a settlement had not been reached. 7 No other claims or answers have been filed, and the time All Claimants would On June 15, 2017, Plaintiff commenced case number CV 17-4439-DSF 8 (PLAx), and notice was given and published in accordance with law. 9 Red Granite Pictures, Inc.; Red Granite Capital US, LLC; Red Granite 10 Capital, Ltd.; Red Granite International, Inc.; Red Granite 11 Entertainment Holdings, LLC; DDTo Finance, LLC; Dumb and Dumber To, 12 LLC; RGDD2 Productions, LLC; Daddy’s Home LLC; the Union Entities; 13 and Paramount Pictures Corporation (collectively, the “Potential 14 Claimants”) informed the Government that they had potential claims to 15 the defendant assets any and all rights, presently-held and future, 16 for the motion pictures ”Daddy’s Home” and “Dumb and Dumber To” 17 belonging to Red Granite Pictures, including copyright and 18 intellectual property rights, as well as the right to collect and 19 receive any revenue or receipts (whether gross or net), royalties, 20 and/or other proceeds resulting from the ownership by or interest of 21 Red Granite Pictures in connection with the role of Red Granite 22 Pictures in producing, distributing, or otherwise financing or 23 promoting the motion pictures ”Daddy’s Home” and “Dumb and Dumber 24 To,” as well as any and all monies received or held by Red Granite 25 Pictures, whether as cash or held in any account in any financial 26 institution, that constitutes any and all proceeds, to include but 27 not limited to any revenue or receipts (whether gross or net), 28 royalties, and/or other proceeds resulting from the ownership by or 3 1 interest of Red Granite Pictures, whether in whole or part, in 2 connection with the role of Red Granite Pictures in producing, 3 distributing, or otherwise financing or promoting the motion pictures 4 ”Daddy’s Home” and “Dumb and Dumber To,” or related to or derived 5 from same (hereinafter “DH/DDTO,” as more specifically described in 6 Attachment A to the original Complaint in case number CV 17-4439-DSF 7 (PLAx), and together with TWOWS, the “Defendant Assets”). 8 claims or answers have been filed, and the time for filing such 9 claims and answers has expired. No other All Potential Claimants would have 10 filed claims to the Complaint in case number CV 17-4439-DSF (PLAx) if 11 a settlement had not been reached. 12 Now, the parties have reached an agreement that is dispositive 13 of the claims and potential claims to the Defendant Assets in case 14 numbers 16-cv-5362-DSF (PLAx) and 17-cv-04439-DSF (PLAx) (the 15 “Actions”). 16 Consent Judgment (the “Agreement,” a copy of which is annexed hereto 17 as Exhibit A), and for good cause shown, IT IS ORDERED, ADJUDGED AND 18 DECREED; 19 20 A. Based on the parties’ Stipulation and Request for a This Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1345 and 1355. 21 B. The operative Verified Complaints for Forfeiture In Rem in 22 the Actions (the “Complaints”) assert claims pursuant to 18 U.S.C. 23 §§ 981(a)(1)(A) and (C). 24 C. Notice of the Actions has been given in accordance with 25 law. All potential claimants to the Defendant Assets other than 26 Claimants and Potential Claimants are deemed to have admitted the 27 allegations of the Complaints with respect to the Defendant Assets. 28 4 1 D. For purposes of this Consent Judgment, the term “Red 2 Granite” is defined to include, collectively and individually: Red 3 Granite Pictures, Inc.; Red Granite International, Inc.; Red Granite 4 Capital Ltd.; Red Granite Partners, Inc.; Red Granite Capital US, 5 LLC; Red Granite Music, LLC; Red Granite Investment Holdings, LLC; 6 Red Granite Real Estate Holdings, LLC; Red Granite Entertainment 7 Holdings, LLC; Red Granite Entertainment, Inc.; RG Productions 8 Development, LLC; DDTo Finance, LLC; RGDD2 Productions, LLC; Dumb and 9 Dumber To, LLC; TWOWS, LLC; The Papillon Project, LLC; Papillon Movie 10 LLC; Papillon Movie Finance LLC; Daddy’s Home, LLC; Daddy’s Home 11 Finance, LLC; OOTF, LLC; The Horns Project, Inc.; Victory or Death, 12 LLC; The Horns Project Productions Ltd.; Blue Box International LLC; 13 and Metropolis IX Capital Advisors, LLC, as well each of their 14 predecessors, successors, assigns, subsidiaries, parent companies, 15 and affiliated entities. 16 E. Nothing in this Consent Judgment or the Agreement 17 constitutes an admission of wrongdoing or liability on the part of 18 Red Granite, its Shareholders (as defined below), or the Union 19 Entities, nor can this Consent Judgment or the Agreement be 20 admissible against Red Granite, its Shareholders, or the Union 21 Entities in any proceeding as evidence of any of the allegations set 22 out in the operative complaints in the Actions. 23 Forfeiture Amount 24 25 1. Red Granite shall: a. Pay the amount of $60,000,000.00 as substitute res for 26 the Defendant Assets (the “Forfeiture Amount”) in a manner consistent 27 with the terms of the Agreement, and agrees to forfeit to the 28 Government all rights, title, and interest in the Forfeiture Amount. 5 1 b. In connection with any and all funds Red Granite 2 intends to provide to satisfy any portion of the Forfeiture Amount, 3 Red Granite shall identify the source of those funds and provide to 4 the Government sufficient information to satisfy the Government as to 5 the legitimacy of any and all sources of such funds, other than funds 6 already in the possession of or held for the benefit of Red Granite 7 (e.g., the “Paramount Funds,” as defined below). 8 9 c. Within ten [10] business days from the Court’s entry of the consent judgment, Paramount Pictures Corporation (“Paramount”) 10 shall transfer to the Government, or cause to be transferred to the 11 Government, all funds in Paramount’s possession or control on that 12 date that, as shown on the most recent participation statement issued 13 by Paramount, are due from Paramount to Red Granite Capital US, LLC 14 from the motion picture “Daddy’s Home” (the “Paramount Funds”). 15 Government shall hold the Paramount Funds in an interest-bearing 16 account, subject to paragraph 8(d)(i) of the Agreement. 17 d. The Pursuant to paragraphs 39 and 42(c) of the Agreement, 18 Paramount shall pay directly to Red Granite Capital US, LLC, Red 19 Granite Pictures, Inc., or their assign, any funds that, as shown on 20 the quarterly or annual (as applicable) statements issued by 21 Paramount after the date of the transfer to the Government prescribed 22 in paragraph 8(c) of the Agreement, become due from Paramount to Red 23 Granite from the motion picture “Daddy’s Home”. 24 hold, and not expend nor disburse, such funds, including as 25 Collateral (as that term is defined in paragraph 17 of the 26 Agreement), until such time as either (a) Red Granite satisfies the 27 entire Forfeiture Amount, or (b) the Government consents in writing 28 to Red Granite’s use of such funds. 6 Red Granite shall 1 2 e. The Forfeiture Amount shall be payable as follows: i. “First Payment”: No later than 30 days after the 3 consent judgment is entered by the Court, subject to Paramount’s 4 timely compliance with the requirements of Paragraph 8(c) of the 5 Agreement, Red Granite shall be deemed to have paid the Government an 6 amount equal to $30 million (or more, at Red Granite’s sole election) 7 from the Paramount Funds, which the Government may thereafter 8 transfer as it deems appropriate; 9 ii. “Second Payment”: No later than 180 days after 10 the Government receives the payment of the $30 million described in 11 the “First Payment,” Red Granite shall pay to the United States an 12 additional $20 million. 13 pre-pay any portion of the Forfeiture Amount as of the date that the 14 Second Payment is due, the Second Payment shall be in an amount such 15 that Red Granite has paid the Government a total of at least $50 16 million, plus applicable interest as set forth below; and 17 iii. In the event that Red Granite has chosen to “Third Payment”: No later than 180 days after 18 the Government receives the “Second Payment,” Red Granite shall pay 19 to the United States an amount no less than $10 million. 20 event that Red Granite has chosen to pre-pay any portion of the 21 Forfeiture Amount as of the date that the Third Payment is due, the 22 Third Payment shall be in an amount such that Red Granite has paid 23 the Government a total of $60 million, plus applicable interest as 24 set forth below (i.e., the entire Forfeiture Amount); 25 iv. In the From the date of the Court’s entry of the consent 26 judgment, Red Granite shall pay the Government 2% interest per annum 27 on any unpaid portion of the Forfeiture Amount, which shall be 28 payable in addition to and at the same time as the payment schedules 7 1 in (i) – (iii) above. 2 of the Second Payment and the Third Payment is due, the Government 3 and Red Granite shall calculate the amount of interest due and 4 confirm in writing the total amount due and owing for such payment. 5 v. Thirty [30] days prior to the date that each For the avoidance of doubt, Red Granite may 6 prepay any portion of the Forfeiture Amount without accruing interest 7 thereon or incurring any other prepayment penalty. 8 9 2. Should Red Granite not make full payments in accordance with the terms of the Agreement, the Government may declare an event 10 of default. 11 provide written notice to Red Granite, with a copy to the Union 12 Entities, and allow Red Granite seven [7] business days to cure any 13 such default. 14 not fully cure the default, the Government may immediately accelerate 15 the payment schedule for the entire remainder of the Forfeiture 16 Amount not then paid. 17 3. Should the Government declare such a default, it shall Following this seven-day period, should Red Granite Immediately following the First Payment (i.e., the $30 18 million payment to the Government from the Paramount Funds), the 19 Government shall cause $3 million to be paid from the Paramount Funds 20 to Red Granite, to an account designated in writing by counsel to Red 21 Granite. 22 remains on deposit with the Government after (i) the First Payment 23 has been made to the Government and (ii) the initial $3 million has 24 been distributed directly to Red Granite, is known as the “Remainder 25 Funds.” 26 4. In the Agreement, the amount of the Paramount Funds that The Government and Red Granite intend that the $3 million 27 from the Paramount Funds that is paid directly to Red Granite 28 pursuant to the preceding Paragraph is an amount roughly sufficient 8 1 to cover Red Granite’s normal operating expenses and disclosed 2 obligations through the date that the Second Payment is due. 3 Notwithstanding Red Granite’s best efforts to project that $3 million 4 will be an amount sufficient to cover Red Granite’s normal operating 5 expenses and disclosed obligations until the Second Payment is due, 6 within ten [10] business days upon written application by Red Granite 7 to a “Control Group” that the Government has specifically identified 8 and made known to Red Granite, the Government shall release to Red 9 Granite such portion of the Remainder Funds as are necessary to pay 10 for obligations incurred by Red Granite prior to the date of this 11 Agreement, and which have been disclosed to the Government. 12 5. Thirty [30] days prior to the due date of the Second 13 Payment, Red Granite may provide to the Government a schedule of 14 normal operating expenses and disclosed obligations that Red Granite 15 has undertaken to pay during the 180 day period following the Second 16 Payment, which the Government shall release as set forth in Paragraph 17 11 of the Agreement, i.e., within ten [10] business days upon written 18 application by Red Granite to the “Control Group,” the Government 19 shall release to Red Granite such portion of the Remainder Funds as 20 are necessary to pay for Red Granite’s scheduled normal operating 21 expenses and disclosed obligations over the 180 days period following 22 the due date of the Second Payment. 23 however, the Government shall have no obligation to release 24 additional Remainder Funds to Red Granite under this paragraph if (a) 25 Red Granite determines to raise funds to make the Second Payment by 26 selling or entering into a new borrowing agreement secured by the 27 Defendant Assets (a “Covered Transaction”), and (b) by the due date 28 of the Second Payment, Red Granite is unable to enter into a Covered 9 Notwithstanding the foregoing, 1 Transaction, and (c) Red Granite has not otherwise made the Second 2 Payment. 3 yet closed, at the time that the Second Payment is due (and Red 4 Granite has not otherwise made the Second Payment), the Government 5 shall release to Red Granite such portion of the Remainder Funds as 6 are necessary to pay for ordinary course obligations through two 7 weeks following the date of the scheduled closing of such Covered 8 Transaction. 9 deemed unable to enter into a Covered Transaction if it has contacted If a Covered Transaction is scheduled to close, but has not For purposes of this Agreement, Red Granite shall be 10 (or affirmatively declined to contact) customary lenders and buyers 11 in the market for motion picture assets or revenue streams, as well 12 as non-traditional buyers in the capital markets (such as hedge funds 13 or private equity funds), none of which has made a firm commitment to 14 enter into a Covered Transaction. 15 6. In addition, within ten [10] business days upon written 16 application by Red Granite, the Government may release to Red Granite 17 such portion of the Remainder Funds as are necessary to pay for other 18 ordinary course expenses or to fund transactions outside of Red 19 Granite’s ordinary course, as defined below. 20 consent to release such funds may not be unreasonably withheld. 21 the extent that there is a disagreement about whether any such 22 expense is appropriate, Red Granite and the Government shall meet and 23 confer, and any disputes shall be brought to the Court for decision. 24 Red Granite shall be responsible for the reasonable costs of any 25 professional services that the Government, in its sole discretion, 26 believes necessary for it to make a reasonably informed decision 27 concerning the release of Remainder Funds for any proposed non- 28 ordinary course transaction. 10 The Government’s To 1 7. For the avoidance of doubt, non-ordinary course 2 transactions within the meaning of the previous paragraph include, 3 but are not limited to the following: 4 a. Sale or transfer of ownership interest in any Red 5 Granite entity or affiliate, except as set forth in Paragraphs 17-22 6 of the Agreement. 7 b. Payment of dividends or distributions to shareholders 8 other than salaries, provided, however, that Riza Aziz (the “Majority 9 Shareholder”) shall continue to draw no salary (other than the 10 minimum required in order to ensure continuity of health insurance 11 coverage under Red Granite’s plan) until the Forfeiture Amount has 12 been paid in full, as he has done voluntarily during the pendency of 13 these Actions. 14 15 c. forth in Paragraphs 17-22 of the Agreement. 16 17 d. e. 22 Acquiring capital assets of a value greater than $50,000.00. 20 21 Entering into new loan facilities, except as set forth in Paragraphs 17-22 of the Agreement. 18 19 Issuance or repurchase of equity shares, except as set f. Selling or otherwise disposing of assets, except as set forth in Paragraphs 17-22 of the Agreement. 8. At any time, and upon Red Granite’s written notice to the 23 Government, Red Granite may apply all or part of the Remainder Funds 24 towards partial or full satisfaction of the Forfeiture Amount. 25 9. Following payment in full of the Forfeiture Amount, the 26 Government shall release to Red Granite that portion of the Remainder 27 Funds (and any interest earned thereon) not already distributed to 28 Red Granite or paid to the Government. 11 1 2 Security Interest 10. To secure the Forfeiture Amount, Red Granite shall grant to 3 the United States a General Business Security Interest and a pledge 4 of all copyrights and other after-acquired property, subordinated 5 only to existing valid, perfected security interests (the 6 “Collateral”), provided, however, that the Collateral shall not 7 include Red Granite’s development assets, as identified to the 8 Government (the “Excluded Development Assets”), provided further, 9 however, that the Collateral shall include Red Granite’s rights to 10 proceeds, in any form, from the Excluded Development Assets. 11 Government and Red Granite shall insure that the security interest 12 granted to the United States under this Paragraph is consistent with 13 Red Granite’s existing contractual obligations, including, but not 14 limited to, and in furtherance of Paragraph 33 of the Agreement, 15 customary Union Entity lien priority and inter-creditor arrangements 16 in connection with motion pictures produced or distributed by Red 17 Granite that are produced subject to Union Entity contracts, 18 including motion pictures derived from Excluded Development Assets. 19 11. The Notwithstanding anything in this Consent Judgment or the 20 Agreement to the contrary, Red Granite may, in its sole discretion, 21 sell or borrow against the Collateral (in whole or in part) under the 22 following circumstances: 23 a. All proceeds from any such sale or borrowing shall be 24 paid to the Government in satisfaction of the 25 Forfeiture Amount, except 26 b. If and only if Red Granite has paid the first two 27 installments of the Forfeiture Amount (i.e., a total 28 of $50 million), Red Granite may retain the proceeds 12 1 of any such sale or borrowing in amount of no more 2 than $5 million, to be used exclusively for 3 development and overhead. 4 such sale or borrowing shall be paid to the Government 5 in satisfaction of the Forfeiture Amount, regardless 6 of whether such monies are due and owing under this 7 Agreement yet. 8 c. 9 Any additional proceeds of In the event that Red Granite retains any funds from a sale of or borrowing against the Collateral pursuant 10 to paragraph 18(b) of the Agreement, Red Granite shall 11 grant to the United States an additional security 12 interest in Red Granite’s rights to the proceeds from 13 any development asset financed with such funds. 14 12. Upon written consent of both the Government and Red 15 Granite, other assets may be substituted for some or all of the 16 Collateral. 17 13. The entirety of the Agreement shall be with recourse to the 18 Majority Shareholder in his personal capacity, and the Majority 19 Shareholder shall personally guarantee Red Granite’s payment 20 obligations (described in Paragraphs 8-16 of the Agreement) and the 21 Majority Shareholder shall pledge all of his assets in whatever form 22 held, of any type, and wherever located (the “Majority Shareholder 23 Assets”), to the full satisfaction of Red Granite’s obligation to pay 24 the Forfeiture Amount. 25 14. Red Granite and the Majority Shareholder shall execute such 26 documentation as may be reasonably necessary in order to effectuate 27 and perfect the security interests and pledge of the Majority 28 Shareholder Assets. 13 1 15. For the avoidance of doubt, and notwithstanding anything to 2 the contrary in this Consent Judgment or the Agreement, nothing in 3 this Consent Judgment or the Agreement shall entitle the Government 4 to any amount of money greater than the Forfeiture Amount (plus all 5 applicable interest). 6 Release of Property 7 16. In consideration for the payment of the Forfeiture Amount, 8 the United States agrees to abandon its claims to forfeit the 9 Defendant Assets. 10 11 Surrender of Rights 17. Upon full payment to the Government of the Forfeiture 12 Amount, any and all potential claimants who had standing to file 13 claims against the Defendant Assets but did not, including secured 14 creditors such as Aabar Investments PJS Limited, shall be deemed to 15 have surrendered all rights, title, and interest in the Defendant 16 Assets. 17 Paramount have surrendered any right, title, or interest they may 18 have in the Defendant Assets, if any. 19 No Interference 20 18. For the avoidance of doubt, neither the Union Entities nor Red Granite shall not file, or cause any other person or 21 entity to file, or assist any other person or entity in filing, any 22 claim to the Forfeiture Amount or the Defendant Assets, or in any way 23 interfere with or delay the forfeiture of the Forfeiture Amount. 24 19. Upon request of the Government, Red Granite shall 25 reasonably cooperate with the Government in connection with 26 responding to any claims asserted against the Forfeiture Amount or 27 the Defendant Assets. Nothing in this paragraph shall require Red 28 Granite to waive attorney-client privilege, the work product 14 1 doctrine, or any other privilege, immunity, or statutory or 2 constitutional right or protection. 3 No Admission of Liability/No Tax Refund 4 5 6 20. This Consent Judgment and the Agreement do not constitute an admission of liability or fault on the part of Red Granite. 21. Notwithstanding any other provision of this Consent 7 Judgment or the Agreement, the payment of the Forfeiture Amount does 8 not constitute a fine, penalty, or punitive damages, provided, 9 however, that the Forfeiture Amount shall be forfeited in its 10 entirety to the Government, and shall not be claimed as a deduction 11 or write-off for tax purposes. 12 Release of Civil Claims 13 22. The Government and Red Granite hereby fully and finally 14 compromise, settle, release, and dispose of the following 15 (collectively, the “Settled Claims”): 16 a. Any and all civil claims, including under the asset 17 forfeiture or money laundering statutes, that the 18 Government has asserted or could assert in connection 19 with alleged violations arising out of the specified 20 unlawful activity alleged in the Complaints, or any 21 other offenses arising from or related to the events 22 and acts described in the Complaints, including any 23 offenses having to do with 1MDB in any way (the 24 “Covered Conduct”), against any of the following 25 people, entities, or property: 26 i. 27 ii. 28 Red Granite, as defined above. Red Granite’s officers, directors, employees, shareholders, and agents, who were employed by 15 1 Red Granite on or before September 14, 2017, 2 whose identities and roles were disclosed 3 explicitly to the Government prior to the 4 execution of this Agreement. 5 provided in this sub-paragraph is limited to such 6 people’s work in connection with Red Granite, and 7 does not release such people in connection with 8 their work with or for any other entity or 9 person. 10 iii. The release Any ownership interest in Red Granite held by its 11 shareholders, which was held on or before 12 September 14, 2017, and which Red Granite 13 disclosed explicitly to the Government prior to 14 the execution of this Agreement, provided, 15 however, that the pledge of Majority Shareholder 16 Assets described in Paragraphs 20-21 of the 17 Agreement, shall include the Majority 18 Shareholder’s ownership interests in Red Granite; 19 iv. Any property, real, personal, or intangible 20 (including intellectual property) in the custody, 21 control, or possession of Red Granite as of 22 September 14, 2017, and that Red Granite 23 disclosed explicitly to the Government prior to 24 the execution of the Agreement, and the proceeds 25 of such property; 26 v. Any property derived from Red Granite’s 27 intellectual property, including future works 28 based on that intellectual property and the 16 1 proceeds payable from such works, that Red 2 Granite owned on or before September 14, 2017, 3 and disclosed explicitly to the Government prior 4 to the execution of the Agreement; 5 vi. Any property in the custody, control, or 6 possession of any other person or entity that was 7 received from Red Granite, including but not 8 limited to payments made pursuant to agreements 9 concerning motion picture proceeds, on or before 10 September 14, 2017, and disclosed explicitly to 11 the Government prior to the execution of the 12 Agreement. 13 vii. Current and future proceeds payable to Red 14 Granite from motion pictures, including but not 15 limited to “The Wolf of Wall Street,” “Friends 16 With Kids,” “Dumb and Dumber To,” “Horns,” “Out 17 of the Furnace,” “Daddy’s Home,” and “Papillon,” 18 as well as any projects of any kind (motion 19 picture, television, or otherwise) under 20 development or which Red Granite may be involved 21 in developing in the future. 22 viii. For the avoidance of doubt, the releases provided 23 in the Agreement shall not include any asset that 24 is currently subject to a civil forfeiture claim 25 by the Government in any of the related cases 26 pending in this District, other than the 27 Defendant Assets. 28 b. Any and all claims or defenses that Red Granite may or 17 1 could assert against the Government, including its 2 agencies, agents, officers, employees and 3 representatives, including, without limitation, all 4 agents, officers, employees and representatives of the 5 Federal Bureau of Investigation, the Internal Revenue 6 Service, Criminal Investigation, as well as all 7 agents, officers, employees and representatives of any 8 state or local government or law enforcement agency 9 involved in the investigation of this matter, related 10 to the Covered Conduct or the Complaints, including 11 any claims for reimbursement of funds expended on the 12 Information Agent or Independent Operational 13 Fiduciary, as those terms have been defined in prior 14 orders of the Court. 15 23. Prior to the execution of the Agreement, Red Granite 16 provided to the Government a list of all assets to be released as 17 part of the Settled Claims. 18 shall not be released. 19 24. Any material asset not so identified With respect to the Settled Claims enumerated above and in 20 Paragraphs 29 and 30 of the Agreement, the Government and Red Granite 21 have acknowledged and agreed that the releases they give to each 22 other, subject and pursuant to Paragraphs 29 and 30 of the Agreement, 23 apply to all such claims known or unknown, foreseen, or patent or 24 latent which either party may have against the other, and each party 25 has thereby waived application of California Civil Code Section 1542, 26 as set forth more completely in Paragraph 31 of the Agreement. 27 28 25. Nothing in the Agreement shall be read to release any potential criminal claims of any kind against any person or entity. 18 1 2 Union Entities Claims 26. Notwithstanding the foregoing, nothing in the Agreement 3 shall be construed to affect, release, or impair any existing or 4 future rights or claims that the Union Entities may have with respect 5 to motion pictures produced, distributed, or otherwise exploited by 6 Red Granite, which claims shall pass through unaffected by the 7 Agreement. 8 Hold Harmless 9 27. With regard to the Covered Conduct, the United States shall 10 hold harmless any financial institution, as defined under Title 31, 11 Section 5312(a)(2), in connection with providing ordinary-course 12 banking services to Red Granite, including, without limitation: 13 providing access to or opening deposit accounts, custodial accounts, 14 investment accounts, check clearing or processing services, wire 15 transfer services, and secured or unsecured lending. 16 avoidance of doubt, with regard to the Covered Conduct, the United 17 States shall hold harmless under this paragraph any such financial 18 institution, or any other entity in the business of extending credit 19 for motion pictures, for engaging in secured or unsecured lending 20 agreements with Red Granite in connection with motion pictures that 21 are under development or in production at the time of the Agreement, 22 or that come under development or enter into production in the 23 future. 24 of extending credit for motion pictures” if it has been in the 25 principle business of motion picture finance for at least the 36 26 months period preceding the date of any proposed transaction and has 27 an established history of financing motion pictures that were 28 released in the United States. For the As used in this sub-paragraph, an entity is “in the business With respect to any other potential 19 1 source of film financing (i.e., from a source other than a financial 2 institution or an entity in the business of extending credit for 3 motion pictures, as defined herein), the Government may in its sole 4 discretion, upon request by either Red Granite or the potential 5 source of film financing, confirm that a financing transaction is 6 subject to the hold harmless provision of this sub-paragraph if Red 7 Granite identifies the source of those funds and provides to the 8 Government sufficient information to satisfy the Government as to the 9 legitimacy of any and all sources of such funds. For the avoidance 10 of doubt, neither Red Granite nor any potential financier is required 11 to seek such confirmation from the Government, but may do so at their 12 sole election. 13 28. With regard to the Covered Conduct, the United States 14 likewise shall hold harmless any studio, distributor, trade vendor, 15 Union Entity, professional firm, or any other person as a result of 16 engaging in ordinary-course business dealings with Red Granite. 17 the avoidance of doubt, such ordinary-course business dealings 18 expressly includes but is not limited to the remittance of payments 19 by any motion picture studio or taxing authority in accordance with 20 the provisions below. 21 29. For Notwithstanding any provision to the contrary, the hold 22 harmless provisions of the Agreement apply purely prospectively, and 23 do not release any individual or entity for historical conduct. 24 30. However, subject to Paragraph 38 of the Agreement, certain 25 financial institutions, studios, distributors, trade vendors, Union 26 Entities, professional firms, and other third parties that may have 27 relied upon the prior orders in the Actions holding them harmless in 28 connection with their business with Red Granite (i.e., the 20 1 Collections Orders, as defined below) may continue to rely on those 2 orders, whose hold harmless provisions remain in full force and 3 effect. 4 31. For the avoidance of doubt, nothing in the Agreement 5 relieves any financial institution, as defined in Paragraph 34 of the 6 Agreement, of their obligation to monitor transaction activity in 7 accordance with their obligations under the Bank Secrecy Act, comply 8 with anti-money laundering laws (including 18 U.S.C. §§ 1956 and 9 1957), and file Bank Secrecy Act reports, as appropriate and in the 10 ordinary course of that financial institution’s business. 11 financial institution shall be required to file Bank Secrecy Act 12 reports for ordinary-course transactions involving Red Granite or its 13 Shareholders, or to otherwise file any Bank Secrecy Act reports, 14 solely because Red Granite or its Shareholders are a party to a 15 transaction. 16 Third Parties Permitted to do Business 17 32. No All third parties are permitted to continue making payments 18 to, receiving payments from, and doing business with Red Granite 19 under any agreements that were executed on or before September 14, 20 2017, or which may be executed between September 14, 2017, and the 21 date on which Red Granite completes payment of the Forfeiture Amount, 22 and were disclosed explicitly to the Government, subject to the hold- 23 harmless provisions. 24 33. For the avoidance of doubt, and without limiting the scope 25 of either the above language or the language of the hold-harmless 26 provisions (i.e., paragraphs 34-38 of the Agreement): 27 28 a. Any studio, distributor, trade vendor, professional firm, or trade organization is permitted to make payments to and 21 1 do business with Red Granite, subject to the hold-harmless 2 provisions, including but not limited to Paramount; 3 Universal Pictures, a division of Universal City Studios 4 LLC; Sony Pictures Entertainment; Twentieth Century Fox 5 Film Corporation; Warner Bros. Entertainment Inc.; Lions 6 Gate Films Inc.; the Screen Actors Guild-American 7 Federation of Television and Radio Artists; the Directors 8 Guild of America, Inc.; the Writers Guild of America West, 9 Inc.; the Writers Guild of America East, Inc.; the 10 International Alliance of Theatrical Stage Employees; the 11 International Brotherhood of Teamsters Studio 12 Transportation Drivers; and the Motion Picture Industry 13 Pension and Health Plans; 14 b. Any financial institution, as defined in Paragraph 34 of 15 the Agreement, that provides banking services of any kind 16 to Red Granite or its Shareholders, in their corporate or 17 individual capacities, is expressly permitted to do so, 18 subject to the hold-harmless provisions. 19 34. Notwithstanding anything else in this Consent Judgment or 20 the Agreement, other than what is required by existing law or 21 regulations, the Agreement imposes absolutely no prohibition, 22 restriction, or limitation whatsoever on any third party’s right or 23 ability to conduct business with Red Granite. 24 the Government have imposed any prohibition, restriction, or 25 limitation on Red Granite’s business or the right or ability of third 26 parties to conduct business with Red Granite. 27 restriction, or limitation should be implied from the Actions, the 28 Complaints, the Agreement, or this Consent Judgment. 22 Neither the Court nor No such prohibition, 1 Payments by Third Parties 2 35. 3 Conduct: 4 For the avoidance of doubt, with regard to the Covered a. All third parties obligated to pay proceeds from “The 5 Wolf of Wall Street” and “Dumb and Dumber To” into the 6 Collection Account (as defined in the Court’s orders 7 dated August 16, 2016 [ECF No. 30], and July 7, 2017 8 [ECF No. 114] in case number 16-cv-5362-DSF (PLAx), 9 and the substantially identical order in case number 10 17-cv-4439-DSF (PLAx) (collectively, the “Collections 11 Order”)) are expressly permitted and (subject to the 12 limits of this Court’s jurisdiction) ordered to do so 13 without interruption, subject to the hold-harmless 14 provisions and the terms of the Agreement; such third 15 parties may include but are not limited to Paramount 16 Pictures Corporation; Universal Pictures, a division 17 of Universal City Studios LLC; and any taxing 18 authority. 19 b. All third parties obligated to pay proceeds from 20 “Friends With Kids” into the FWK Collection Account 21 (as defined in the Collections Order) are expressly 22 permitted and (subject to the limits of this Court’s 23 jurisdiction) ordered to do so, subject to the hold- 24 harmless provisions and the terms of this Agreement; 25 such third parties may include but are not limited to 26 Lions Gate Films Inc.; and any taxing authority. 27 28 c. All third parties obligated to pay to Red Granite or its assigns (including, without limitation, collateral 23 1 assignees) the proceeds of motion pictures other than 2 “The Wolf of Wall Street,” “Dumb and Dumber To,” or 3 “Friends With Kids” (including, without limitation, 4 “Horns,” “Out of the Furnace,” “Daddy’s Home,” and 5 “Papillon”), including but not limited to Paramount 6 Pictures Corporation, are expressly permitted and 7 (subject to the limits of this Court’s jurisdiction) 8 ordered to do so subject to the hold-harmless 9 provisions and the terms of this Agreement, and Red 10 Granite or its assigns (including, without limitation, 11 collateral assignees) are permitted to receive such 12 proceeds. 13 36. Any restraints imposed by the Collections Order, including 14 with respect to the Collection Account and the FWK Collection Account 15 are dissolved. 16 Account Management B.V. may release any funds from the Collection 17 Account and the FWK Collection Account due to Red Granite, pursuant 18 to the terms of any applicable Collection Account Management 19 Agreement(s). 20 Binding Effect; Benefits 21 37. For the avoidance of doubt, Fintage Collection The Agreement and the Consent Judgment shall be binding 22 upon and inure to the benefit of each of the parties and their 23 successors and assigns. 24 Court Approval; Good Faith 25 38. Notwithstanding any provision to the contrary, the 26 Agreement is expressly subject to and contingent upon approval of the 27 Court. 28 Court or is overturned or modified on appeal, the parties shall If the Agreement, or any portion thereof, is rejected by the 24 1 negotiate in good faith to revise the terms of the Agreement such 2 that it can be approved. 3 39. During any period that the Agreement is not in force, 4 neither the Agreement nor any negotiations or writings in connection 5 therewith shall in any way be construed as or deemed to be evidence 6 of an admission on the part of any Party regarding any claim, right, 7 or defense that such Party may have against any other Party. 8 9 40. Notwithstanding the previous paragraph, any third party is entitled to reasonably rely on the hold-harmless provisions for 10 actions taken while the Agreement is not in force. 11 Miscellaneous 12 41. This Consent Judgment shall be the final and complete 13 satisfaction of the claims asserted by the United States and Red 14 Granite. 15 through any court proceeding or other process, the return of the 16 Forfeiture Amount except as otherwise provided herein. 17 otherwise provided for in the Agreement, the parties’ rights to 18 further litigate against each other their respective interests in the 19 Forfeiture Amount or to petition for remission or mitigation of the 20 settlement, releases, or forfeiture is waived. 21 42. Red Granite shall, individually and jointly, not seek, Except as All parties shall bear their own fees and costs. The 22 parties have waived any and all claims for attorney’s fees and costs. 23 For the avoidance of doubt, notwithstanding the provisions of Title 24 28, United States Code, Section 2465, or any other “cost” or “fee- 25 shifting” statute or regulation, Red Granite expressly has waived any 26 right to seek any fees or expenses incurred by Red Granite related to 27 the seizure and/or forfeiture of the Defendant Assets. 28 43. Red Granite shall not, through present or future attorneys, 25 1 officers, directors, employees, agents or any other person authorized 2 to speak for Red Granite issue any press release contradicting or 3 that is inconsistent with this Consent Judgement or the Agreement. 4 At least 48 hours prior to any Red Granite press release related to 5 this Consent Judgment or the Agreement, Red Granite shall provide to 6 the Government an advance copy of such press release. 7 44. The Agreement, and any dispute arising thereunder, shall be 8 governed by the laws of the United States and the laws of the State 9 of California. 10 This Court shall retain jurisdiction to enforce the Agreement and this Consent Judgment. 11 45. In the event that any disputes arise about the 12 interpretation of or compliance with the terms of the Agreement or 13 this Consent Judgment, the parties shall endeavor in good faith to 14 resolve any such disputes between themselves before bringing it to 15 the Court for resolution. 16 by one of the parties to the Agreement to comply with its terms or an 17 act by one of the parties in violation of any provision hereof, the 18 parties may move this Court to impose any remedy authorized by law or 19 equity. 20 // 21 // However, in the event of either a failure 22 23 24 25 26 27 28 26 1 46. There shall be no modification of the Agreement unless in 2 writing and signed by all the parties to the Agreement or their 3 authorized representatives, provided, however, that the signature of 4 a representative of the Union Entities and/or Paramount shall not be 5 necessary to modify the Agreement unless the proposed modification 6 would have the effect of impairing any rights the Union Entities 7 and/or Paramount may have or assert. 8 9 DATED:3/8/18 ________________________________ UNITED STATES DISTRICT JUDGE 10 11 12 PRESENTED BY: 13 14 15 16 17 18 19 20 21 22 23 24 DEBORAH CONNOR, Acting Chief Money Laundering and Asset Recovery Section (MLARS) WOO S. LEE JONATHAN BAUM BARBARA LEVY Criminal Division U.S. Department of Justice NICOLA T. HANNA United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section _____________________________ JOHN J. KUCERA JONATHAN GALATZAN Assistant United States Attorneys 25 26 Attorneys for Plaintiff UNITED STATES OF AMERICA 27 28 27

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