Modern VideoFilm Founder Sues New Owner For $100 Million
Moshe Barkat, the founder and former longtime president and CEO of Modern VideoFilm, has filed a $100 million fraud and breach of fiduciary duty lawsuit against Medley Capital, the company that took over the venerable postproduction house in 2014. The suit, filed today in Los Angeles Superior Court (read it here), claims that Medley “ran MVF into the ground and destroyed it.”
At one time, Modern VideoFilm employed more than 500 people, but the suit claims that the company is “now a shell with no assets or employees.”
Medley, a billion-dollar investment fund, had loaned the company $50 million in 2012, and when MVF allegedly defaulted, it brought in the Deloitte Corporate Restructuring Group to manage it. Barkat was ousted by the board of directors, and Scott Avilla, a principal of Deloitte CRG, was named the new CEO.
The suit, filed by Barkat’s Modern VideoFilm Holdings, claims that Medley Capital interfered with a “lucrative joint venture” that Barkat had struck with Technicolor, “which, once consummated, would have provided a pathway for MVF to pay off the Medley loan, at which point MVF would have been stronger than ever.”
The suit claims that Medley “got greedy” and “orchestrated a plan whereby it would emerge as the owner of both MVF and the joint venture.” But the suit claims that the plan “backfired” due to Medley’s “excessive control and misconduct,” causing the deal to fall through.
The suit comes in response to a suit Medley had filed that accused Barkat of fraud and breach of fiduciary duty.
Founded in 1979, Modern VideoFilm provided postproduction work on hundreds of films and TV shows, including Best Picture Oscar winner Slumdog Millionaire, Avatar, Modern Family, Game of Thrones, The Walking Dead, Sons of Anarchy, House of Cards, Falling Skies, How I Met Your Mother, The Grand Budapest Hotel, The Descendants and There Will Be Blood.
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