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Mr. Herz testified that the agreement with TroMetro and SMHC
had always been for Troma to retain any net revenue from its
distribution activities to fund additional distribution expenses
rather than to remit royalties.55 SMHC reported and received no
income from licensing video rights to film titles or film
financing during 1997 and 1998.
XI. Transactions With Imperial Credit Industries, Inc.
In 1997, the Ackerman group engaged in discussions with
Imperial Credit Industries, Inc., culminating in the formation of
Corona Film Finance Fund, LLC.
A. Imperial Credit Industries, Inc.
Before 1992, Imperial Bank acquired or started six different
operating businesses. In 1991, Imperial Bank decided to take two
of those six businesses public, including a residential mortgage
business and thrift and loan. In 1992, Imperial Bank
54(...continued)
Monica” a statement of revenue and expense as of Dec. 31, 1998,
for films that Troma distributed on behalf of TroMetro and SMHC.
This statement shows $23,250 in revenue, $6,907.91 in
distribution expenses, and a $16,342.09 amount due TroMetro. On
Nov. 4, 1998, Troma sent Crown Capital another invoice for
$103,025 on the release of video and DVD for “Banana Monster”,
“Fist of Fear, Touch of Death”, “Astro Zombies”, “Battle of Last
Panzer”, and “Escape from Hell”. This invoice requested a
$50,000 advance payment.
55 In at least one case, the statement to “TroMetro-Santa
Monica” as of Dec. 31, 1998, states “Check Enclosed” for the
amount of revenues exceeding distribution expenses. Mr. Herz
testified that he did not think a check was in fact sent to
TroMetro or SMHC, given the agreement to retain net revenue.
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