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View Full Version : FUNimation Sues A.D. Vision, Sentai, Others for US$8 Million


WTK
01-13-12, 03:27 PM
via ANN (http://www.animenewsnetwork.com/news/2012-01-13/funimation-sues-a.d-vision-sentai-others-for-us$8-million)
Funimation Sues A.D. Vision, Sentai, Others for US$8 Million
posted on 2012-01-13 16:00 EST

Seeks to have ADV (http://www.animenewsnetwork.com/encyclopedia/company.php?id=2)'s 2009 sale of assets declared void

On November 4, 2011, FUNimation Entertainment (http://www.animenewsnetwork.com/encyclopedia/company.php?id=6515) filed a lawsuit in the district court of Harris County, Texas against John Ledford (http://www.animenewsnetwork.com/encyclopedia/people.php?id=351), as well as companies A.D. Vision (http://www.animenewsnetwork.com/encyclopedia/company.php?id=4089), AEsir Holdings (http://www.animenewsnetwork.com/encyclopedia/company.php?id=10156), Sxion 23 (A.K.A. Section23 Films (http://www.animenewsnetwork.com/encyclopedia/company.php?id=8293)), Valkyrie Media Partners, Seraphim Studios, Sentai Filmworks (http://www.animenewsnetwork.com/encyclopedia/company.php?id=8102), Sentai Holdings, and Unio Mystica Holdings (A.K.A. Switchblade Pictures (http://www.animenewsnetwork.com/encyclopedia/company.php?id=10138)) for breach of contract and other claims. Ledford is the CEO and co-founder of A.D. Vision. In the lawsuit, Funimation claims that the defendants owe Funimation "an amount to be proven at trial but currently estimated" to be approximately US$8 million plus interest, costs, and attorneys' fees.

Funimation's lawsuit alleges that it became a creditor of A.D. Vision (ADV (http://www.animenewsnetwork.com/encyclopedia/company.php?id=2)) in regard to a debt ADV owed ARM Corporation, which was a third party licensing entity jointly owned by Sojitz Corporation (http://www.animenewsnetwork.com/encyclopedia/company.php?id=4088) and several other companies. The lawsuit notes that ADV had purchased anime licenses from ARM after May 2006, and in January 2008 ARM "declared ADV to be in default of the parties' agreements." ADV lost (http://www.animenewsnetwork.com/news/2008-01-30/adv-films-removes-titles-from-website-update) the rights to more than 30 anime properties, and in July 2008, Funimation and ARM announced (http://www.animenewsnetwork.com/news/2008-07-04/funimation-picks-up-over-30-former-ad-vision-titles) that they had reached a distribution agreement for those properties.

In the lawsuit, Funimation claims that ARM also gave Funimation the right to enforce ARM's agreement with ADV, specifically in regard to the debt that ADV owed ARM making Funimation a creditor. The suit alleges that ADV never paid this debt, and instead sold its assets for below market price to several companies owned by former ADV executives and shut down (http://www.animenewsnetwork.com/news/2009-09-01/adv-films-shuts-down-transfers-assets-to-other-companies).

The suit goes on to claim that ADV's transfer of assets "was made with the intent to defer, hinder or defraud the creditors of ADV," including Funimation, and that the new companies "succeeded ADV's contractual liability" in regard to the outstanding debt.

Funimation is also requesting that the court declare ADV's transfer of assets "as null, voided and without effect," restoring those assets to the parent company. Funimation is also requesting a jury trial.

On December 23, Sentai Filmworks, Seraphim Studios, Sentai Holdings, Valkyrie Media Partners, Unio Mysteica Holdings, AEsir Holdings, and Section23 Films filed a counterclaim disputing these charges. The companies claim, among other things, that they do not have a contract with Funimation and are not liable to the company. They claim that the companies did not exist when Funimation acquired the rights from ARM to enforce ADV's contract with ARM. In addition, the companies claim that Funimation's lawsuit was filed after the two-year statute of limitations, and that Funimation was not involved with the original contract and cannot claim any direct damages.

The companies are asking that the court declare that Funimation's contract "is not a valid agreement binding on the Defendants," that the companies owe "no duties or performance of any obligations" to Funimation, and that Funimation pay for the companies' attorney's fees, costs, and expenses.

The first pre-trial meeting is currently scheduled for October 5, 2012.

Section23 Films provided ANN with the following statement:
Funimation's lawsuit is completely without merit or basis and we look forward to proving it when we have our day in court. When asked to comment, Funimation told ANN that its official statement is addressed in the lawsuit.

chrisc31
01-13-12, 03:34 PM
I am going to wait until this is over and see who is wrong before I even think about this.

The fans will lose the most.

OutRun2
01-15-12, 04:26 AM
i am going to wait until this is over and see who is wrong before i even think about this.

The fans will lose the most.

+1

Ash Ketchum
01-15-12, 11:26 AM
My immediate, intuitive reaction is to take Funimation's charge at face value and conclude that ADV owed some big money that it didn't have and found a clever, "legal" way to avoid paying some bills and Funimation decided not to take it lying down.

But I could be wrong. Let's see what the judge says.

WTK
01-26-12, 09:20 PM
For the curious...FEATURE: ADV vs ARM, A Tale of Two Lawsuits (http://www.crunchyroll.com/anime-feature/2012/01/26/feature-adv-vs-arm-a-tale-of-two-lawsuits)

And there is this:

http://img717.imageshack.us/img717/6228/jlcpg.png

Ash Ketchum
01-27-12, 05:09 AM
The key line comes at the very end of that account:

It appears both companies had completely unrealistic ideas of what the market was like and of what the other company could pull off.

big e
01-27-12, 12:20 PM
^ When did the crash officially happen? 2007-2008? I recall reading an article on Animenation in 2008 (I think) that showed the profits of anime distribution companies were highest around 2004, then from 2005 onward, they began to sharply decline. So, maybe the anime market never actually expanded like everyone thought; there was just an influx of interest due to Pokemon and DBZ and once those fads wore off, it shrunk back to how it was in the late '90's. The anime companies just thought the interest was still there.

Dragon Fly
01-27-12, 12:27 PM
For the curious...FEATURE: ADV vs ARM, A Tale of Two Lawsuits (http://www.crunchyroll.com/anime-feature/2012/01/26/feature-adv-vs-arm-a-tale-of-two-lawsuits)

And there is this:

http://img717.imageshack.us/img717/6228/jlcpg.png

I guess the question is, is that units sold? Or gross proft?

WTK
05-28-14, 06:53 PM
Funimation v. ADV Lawsuit Settled, Dismissed

http://4NN.cx/.74853