Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 304

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          Inc., contained five film titles.  The “Vista Street” library,              
          purchased by SMHC in March 1999 from Marketing Media Corp. d/b/a            
          Vista Street Entertainment, contained 24 film titles.  The                  
          “Moving Picture Factory” library, purchased by SMHC in October              
          1998 from The Moving Picture Co., Inc., contained 34 film titles.           
               SMHC also investigated a number of film titles and film                
          libraries that, for one reason or another, it did not acquire.              
          IX.  Relationship With TroMetro Films, LLC                                  
               A.  John H. van Merkensteijn                                           
               John H. van Merkensteijn was Mr. Lerner’s longtime friend,             
          client, and business associate.  In the 1970s, Mr. Lerner had               
          represented Mr. van Merkensteijn in some transactions.  Since               
          then, they have stayed in contact and have been friends.  Mr. van           
          Merkensteijn participated in transactions with Mr. Lerner both              
          before and after 1996.                                                      
               B.  TroMetro Films, LLC                                                
               On December 15, 1997, Mr. van Merkensteijn formed TroMetro             
          Films, LLC (TroMetro), to be part of a distribution relationship            
          with SMHC and Troma and to purchase receivables from SMP.  Mr.              
          van Merkensteijn had no office of his own for TroMetro; instead,            
          he had items sent to Crown Capital’s office.                                











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