Posted: 10/29/18 at 9:56pm
Posted: 10/29/18 at 10:03pm
Posted: 10/30/18 at 5:10am
Posted: 10/30/18 at 5:13am
From the Post Article: "Thirteen investors who put over $600,000 into the shuttered show “Nerds” are now suing producer Carl Levin for claiming he’d amassed $6.2 million in funding from major backers like the Facebook founder’s sister Randi Zuckerberg — when he’d raised just $200,000, according to court papers."
YIKES! Move over "Rebecca!"
Posted: 10/30/18 at 10:34am
a few thoughts (I have no facts about this situation):
1. sometimes people get theatres because no one else wants them.
2. it is not unusual to have a theatre before you are fully capitalized. Note however that the investors would have had to authorize use of the funds prior to full capitalization.
3. sometimes committed investors pull out. ordinarily there is no legal commitment. But even if there is/was (or there was fraud or some other cause) you still don't have the bucks.
4. There is no indication here that the investor pulling out defrauded anyone.
5. The claims of fraud here will be tough to prove, I would think, because they run counter to what undoubtedly was said in the offering papers.
6. The Post headline (typically) mis-states the lawsuit in a hyperbolic fashion. The amount of $600k-ish is punitive damages, which they could make up any number for (and which is highly unlikely even if the allegations are proved).
Updated On: 10/30/18 at 10:34 AM
Posted: 10/30/18 at 12:16pm
HogansHero thanks for these thoughts but I still have questions:
1. Yes, this is often true, but I have first hand knowledge that a play from Off-Bway was trying to transfer that season and was in talks with the Shuberts who own the Longacre. So, this theatre in particular was wanted. There may have been other shows in the wings as well as there usually are.
2. I understand that many shows still raise during previews. However, those shows usually have more than 10% of the capitalization raised before getting the theatre. Carl had less than 10% raised going in according to this article.
3. This is true and unfortunate, but it shows that the lead producers did not have a sufficient back up plan, which is just reckless.
4. My impression is that there was no investor who pulled out and that was just a story. If an whale investor did in fact pull out then Carl should be able to easily prove so with emails or some communication thread.
5. If Carl cannot provide proof of ongoing communications with the investor who pulled out and that these communications would reasonably lead him to believe the investment was committed to the same degree he promised these plantiffs then I think there certainly are grounds for fraud. Misleading investors and fraud is a breach of contract for any industry standard offering papers.
6. I believe the $600k was the investors' original investment and the $5M is punitive.
Updated On: 10/30/18 at 12:16 PM
Posted: 10/30/18 at 12:21pm
Posted: 10/30/18 at 12:35pm
I'm wondering that too, Cats. I wonder if he had proof but it was fraudulent, and that's where the lawsuit is partially stemming from? If he did have an investor that backed out, the lawsuit will probably not really achieve anything. Maybe the theater just took a risk, or the information was falsified/exaggerated?
Posted: 10/30/18 at 6:59pm
I reiterate that I don't know anything beyond what's been written. In particular, the Post article (accuracy not being their racket) is not exactly authoritative, and they don't bother to include a copy of the complaint with the article. So we don't know what is left out, nor do we know who the plaintiffs are. We do know who the other named producers were, and they include a respected producer and general manager, Elizabeth Williams, who I assume was GM'ing the show and perhaps exec producing, and other established names. Also Levin, while not an established lead producer, is/was a known quantity.
With that in mind, I have no clue why the Shuberts might have chosen this show other possible alternatives, but these things are often done with an informality that will surprise many. I mention Elizabeth Williams by name because in this scenario if she, as I suspect, was the one making representations, they would likely be accepted without a great deal of scrutiny.
Beyond this, I find it hard to believe that they had only raised $200k plus these investors. (And again, not knowing who the plaintiffs are makes it impossible to guess). Oftentimes, complaints are filed based on a bunch of guesses, because discovery is not available before that. Perhaps the answer will shed more light (and/or a motion for summary judgment).
Obviously there were some things done here that do not reflect positively on Levin or the others involved in the production, but I would not rush to assume everything in the complaint is accurate (or fully accurate), and I certainly would not give the Post credit for much digging beyond reading the complaint and calling one of the producers) who appears to be contradicting at least one assertion. I agree that emails will likely tell much of the tale here; I just don't know what that tale will be.
In order to prove fraud (or misleading investors) the plaintiffs will have to prove that they were told something. If the producers continue to deny ever speaking with them, unless the plaintiffs have some proof, that won't be easy. And without fraud, a lawsuit based on mismanagement is a tough road to hoe. Note, for example, that the plaintiffs would have to show causation (meaning it would have to have been represented in advance). Anyway, in the famous words of someone, we shall see.
Posted: 5/7/25 at 2:41am
Google says the case was dismissed by the trial Court in 2020. I do not know if there was appellate review.
