- 85 -
contributed $10,000 cash, and SMP contributed $250,000 cash and
the $79 million receivable. As of November 5, 1997, Corona’s
capital accounts and percentage interests were as follows:
Capital Account Percentage Interest
Imperial $0 0.00%
SMP 1,550,000 99.00
Mr. Lerner 5,000 0.33
Peridon 10,000 0.67
Total $1,565,000 100.00
The Corona LLC agreement recited that the purposes for
Corona’s formation were “to finance the production and
exploitation of filmed entertainment products and to own
interests in entities engaged in such activities” and “to make
investments in connection with the foregoing activities and
otherwise.” The Corona LLC agreement appointed Mr. Lerner as its
manager and authorized him to act on behalf of Corona to appoint
employees, officers, or additional managers, and to bind the
company in dealings with third parties.58
2. The Corona Transaction
On December 11, 1997, Mr. Lerner sent an email to Irv
Gubman, Imperial’s general counsel, proposing that the previously
discussed transaction be done through Corona rather than SMP.
The email states:
58 On Dec. 16, 1997, the secretary of state of Delaware
certified: “Corona Film Finance Fund LLC is duly formed under
the laws of the State of Delaware and is in good standing and has
a legal existence so far as the records of this Office show as of
the sixteenth day of December, A.D. 1997.”
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