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EBD film rights appears to have been given to the Ackerman group
on December 12, 1996, one day after the purported closing on the
CDR transaction.95 Before then, there appears to have been no
mention or interest in those film rights on the part of the
Ackerman group in their negotiations with CDR. Mr. Lerner, for
his part, could not recall when he was given a listing of the EBD
film rights.
Second, even though the Ackerman group conducted due
diligence in the CDR transaction, the focus of this due diligence
was on Generale Bank’s and CLIS’s tax bases in the contributed
receivables and SMHC stock. Prior to the closing on the CDR
transaction, due diligence with respect to the contributed film
rights was largely nonexistent.96 Indeed, the only evidence of
95 The final draft of the exchange and contribution
agreement in the record has an attached Schedule 1.6(b), which is
a list of the EBD film titles and development projects. The
record contains a facsimile dated Dec. 12, 1996, from White &
Case to Mr. Lerner and several other persons, transmitting an
attached Schedule 1.6(b) to the exchange and contribution
agreement. From the serial numbers on the pages of this faxed
attachment, which also appear on the pages of Schedule 1.6(b)
attached to the exchange and contribution agreement (but which do
not correlate with the serial numbers on the other pages of the
exchange and contribution agreement), it appears that White &
Case actually sent this attached schedule to the Ackerman group
on Dec. 12, 1996, one day after the purported closing on the
transaction.
96 In the exchange and contribution agreement, CDR and CLIS
represented and warranted: “Schedule 1.6(b) attached hereto sets
forth all the assets held by * * * [SMHC], all of which assets
are held free of all material Encumbrances created by * * *
[SMHC]. * * * [SMHC] has good title to all such assets.”
(continued...)
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