Ex-NBA Vet, Film Cos. Strike Back In $45M EB-5 Suit
Former National Basketball Association journeyman Theo Ratliff and various entertainment-related companies facing a $45 million suit over an unsuccessful EB-5 funding deal asked a Georgia federal judge on Wednesday to let them file counterclaims that might be time-barred when the suit, now on hold, resumes.
Ratliff, his company Ratliff Entertainment LLC, the Southern Film Regional Center LLC and other co-defendants asked for permission to file counterclaims for fraud and securities law violations against Open Rivers Media Group Inc., which has accused them of pushing it out of a lucrative funding opportunity with the EB-5 immigrant investor program. They argue that Open Rivers misrepresented its ability to execute the deal Ratliff and SFRC allegedly cut it out of.
“Although defendants believe that the stay is proper, they are concerned about their ability to timely assert currently known, compulsory counterclaims while this action is stayed,” the motion said.
U.S. District Judge Steve C. Jones in April stayed the case to consider the defendants’ motion to dismiss in the wake of a premature motion for summary judgment filed by Open Rivers.
The EB-5 program offers foreign nationals and their families green cards in exchange for investment in American projects, as long as the investment creates at least 10 jobs. Generally, the minimum investment is $1 million, but $500,000 may qualify if it's invested in a rural or high-unemployment area.
Open Rivers claimed in its suit that it signed a contract with SFRC in January 2014 for help preparing an EB-5 application and paid the company $100,000. The same month, the studio signed an investment agreement with Ratliff Entertainment to share profits from the EB-5 application, the suit said.
Ratliff and Open Rivers sought to produce content targeted at African-Americans, according to a news release that the complaint linked to.
But Open Rivers claimed that the business relationship went south between February 2014 and June 2014, with SFRC, Ratliff Entertainment and other defendants seeking to exclude the studio from the EB-5 application process. Open Rivers claimed that SFRC decided to abandon Open Rivers’ application in favor of creating its own EB-5 venture with Ratliff, his company and other NBA players.
On Wednesday, however, Ratliff and SFRC argue in their counterclaim that Open Rivers never had the capability to make the content it promised.
“Counterclaim defendants misrepresented to counterclaimants that Open Rivers had the capability to produce and distribute movies, shows and other media projects that would attract $45 million in co-financing,” the proposed counterclaims said. “In addition, counterclaim defendants misrepresented the timetable and amount of profits to be earned by the investment that they were soliciting.”
Open Rivers is represented by Christopher L. Brown of Brown & Rosen LLC and Daniel Kane of Daniel Kane PC & Associates.
The defendants are represented by Thomas C. Grant of Lewis Brisbois Bisgaard & Smith LLP.
The case is Open Rivers Media Group Inc. et al. v. Southern Film Regional Center LLC et al., case number 1:15-cv-00724, in the U.S. District Court for the Northern District of Georgia.
Subscribe for News
Join Professionals on EB5Projects.com →
This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. EB5Projects.com LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.