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two of the EBD film titles that Troma attempted to distribute,
“Astro Zombies” and “Banana Monster”, were the subject of
immediate cease and desist letters. SMHC was also informed that
the rights to a third film that Troma attempted to distribute,
“Fist of Fear, Touch of Death”, had also expired.
Further, it appears that the physical elements for a number
of the EBD film titles do not exist and that the general physical
condition of the materials for the remaining film titles is
suspect. Indeed, Mr. Peters testified that the physical
materials for many of the film titles were stored at the Epic
warehouse, which was not a temperature- or humidity-controlled
facility, and was not bonded, subject to inventory control, or
otherwise secured.
It is clear that by December 9, 1997, when Troy & Gould gave
their conclusions on the EBD film library, Mr. Lerner was well
aware that there were major problems with the EBD film rights and
that the film library had very little value. If, as petitioner
claims, the EBD film rights were an integral part of a film
business with CDR, then these conclusions would have revealed
some very deep-seeded shenanigans on the part of CDR, Generale
Bank, and CLIS. One would suspect that, in these circumstances,
Messrs. Lerner and Ackerman would have been very upset.
Nonetheless, in April 1998, we find Mr. Lerner meeting with a
representative of Generale Bank. Mr. Lerner testified that he
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