United States of America v. All Rights to and Interests in The Motion Pictures Daddys Home and Dumb and Dumber to Belonging To Red Granite Pictures

Filing 45

CONSENT JUDGMENT OF FORFEITURE by Judge Dale S. Fischer. Related to Judgment 44 . ( MD JS-6. Case Terminated ) (SEE JUDGMENT FOR SPECIFICS). (twdb) Modified on 3/8/2018 (twdb).

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