-129-
financing transactions involving “major” motion picture
companies; however, Mr. Ackerman gave no indication that his
experience in financing extended to the particulars of running a
film distribution business. Plus, the record suggests that the
banks had misgivings about the Ackerman group’s economic
underpinnings.91
d. Inattention to Film Rights in Negotiations
Although the Ackerman group and CDR exchanged numerous
documents over the course of their negotiations, we find scant
reference to any film distribution business or film rights.
There is no evidence that the parties actively negotiated over
the particulars of the purported film business or the specific
film rights that would be contributed to SMHC. The first and
only reference to a purported film distribution business appears
in the drafts of the SMP LLC agreement that Shearman & Sterling
drafted on Rockport Capital’s behalf. Those drafts, including
the final draft, describe the purpose for which SMP was formed as
being, inter alia, to produce and distribute filmed entertainment
products. With respect to this provision, Mr. Geary testified
that, to his knowledge, the banks had no intent to produce or
distribute film products through the transaction with the
91 Mr. Geary testified that, during the negotiations with
the Ackerman group, Mr. Jouannet and other individuals in the
Credit Lyonnais group began to worry “whether Lerner and his
people were good for” the $5 million put price.
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