-142-
so, Mr. Kutner’s appraisal went beyond what Mr. Lerner understood
to have been a valuation based on VHS videotape sales
projections. Indeed, Mr. Lerner testified that “six or seven
years ago when we did all this all we knew about were VHS
videotapes.” “At that time, we focused on what the technology
was thinking that there might be additional technology, so we
valued it only in terms of what we thought the then existing
technology might be and hoping that additional technology would
come along to enhance the value.” Without Mr. Kutner’s testimony
or some corroborating evidence, we are not persuaded that the
Sage Entertainment appraisal was made in good faith or that Mr.
Lerner relied upon it in the course of the CDR transaction.
The nature of the rights, if any, that SMHC obtained in the
EBD film titles was, and remains, patently unclear. On December
9, 1997, Troy & Gould concluded that there were significant gaps
in the chain-of-title documentation for the EBD film titles and
rights to some of the film titles had expired or were expiring.
Troy & Gould concluded that: “it is not possible to determine
what rights have effectively been acquired. It also is unclear
who possesses the rights other than domestic video in the various
pictures, and who possesses the reversion rights in domestic
video.” This point is clearly illustrated when we consider that
100(...continued)
respondent’s expert projected any revenue from the revenue-
sharing (Rentrak) model.
Page: Previous 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 NextLast modified: May 25, 2011