Recently, I was sent this really interesting interview by The Business of Film (TBOF) with Richard Rionda Del Castro (RRDC), Chairman of LA based Hannibal Pictures and his wife Patricia Rionda Del Castro (PRDC). This is the production company that Sonja Morgan frauded who won their suit against her with a judgment of over $7 million.
You will want to read the whole article if you have the time but these are the most interesting excerpts.
RRDC: In 2005 Hannibal controlled a project in which a very big name actor had a strong interest in the leading role. While we were finalizing the acting contract, the actor gave us a short window to go into production because of other film commitments. We began presales and had procured a commitment letter from our regular production lender. During the same period, our lawyer at the time introduced us to his new client who was now in the business and representing to have $250million in cash to invest into film production. They were starting with a slate of 5 pictures and were looking for high profile pictures to finance and co- produce. They took an ad in Variety at AFM in 2005 announcing their intentions, and in January 2006 they signed an agreement with my company, in which they agreed and committed to finance 100% of the film. At that time, they were fully aware that if we agreed to their financing terms, we would be solely relying on them to completely finance the film, and they repeatedly assured us that would not be an issue. This person was Sonja Tremont Morgan, a New York socialite. The production company was Sonja Productions. Her company took an advertisement in the trades, and she used her husband’s name John Adams Morgan, the great-great grandson of J.P. Morgan, and a direct descendant of U.S. President John Adams, who was the Vice President in charge of Financing for the company. Sonja Morgan and her director were representing to everyone they had the cash sitting at a bank in Beverly Hills ready to fund as soon as they had chosen their projects.
We placed our trust in them, our lawyer trusted them, and so did the bankers and agents. We performed due diligence and asked for references from the bankers and lawyers. Sonja Productions had recently financed another film just before us, a decision they had made in a few weeks and had funded two and a half million dollars in cash, so we had proof that they were serious and legitimate, as did our attorney considering he had handled the legal of the first investment they made. They liked our project and repeatedly told us this was exactly what they were looking for. Everything was in order on our side – the chain of title, director, location, crew, bond, insurance were in place and the acting service agreements with the actor was ready to be executed. Everything was ready. At this point the investor and co-producer, Sonja Morgan, was expected to put the money in place with the actor’s agency, which she had agreed to do. The day before she was to transfer the money, she told us in front of her CEO and our lawyer, that it would not be a problem, that she would instruct her bank to move the money. The following day she returned to New York and basically didn’t call us back. She left us dry!! We called her repeatedly asking for the money to be put in escrow, and when we finally spoke with her, her response was that “Deals fall apart in Hollywood all the time” and laughed. She went back to New York, was in breach, and in the end laughed at us. So we initiated legal action and filed a lawsuit, which is a painstaking process, emotionally and financially. We sued her for breach of contract and fraud. The fraud was based on the fact that we found out she never had the money she said she had to finance our film, much less anyone else’s.
Our case has been making its way through the Federal Court system for the last three and a half years. The trial in front of an eight person jury that should have lasted four days turned into 9 days. We are represented by the law firm of Hamrick & Evans, LLP by Ray Hamrick and Marty Barab. They have provided us with tremendous support over this long ordeal, and they performed. On the ninth day, the Jury voted unanimously in our favor. They awarded Patricia, myself and Hannibal Pictures a seven-figure award and also awarded us $250.000.00 in punitive damages against Sonja Morgan personally. Sonja Morgan was found personally liable for breach of contract and fraud. The judgment was signed on September 1, 2009. Now we have the law on our side and we fully intend to collect every dime the jury awarded us.
TBOF: What is puzzling is – what is the motive for carrying the charade on for so long if the money wasn’t there. We are all familiar with the individual who comes into our business and within a couple of months is discovered to not have the money and disappears and another comes along. But this person seems to have taken it right to the eleventh hour.
RRDC: People come into this business and other businesses who are the wife, son, daughter, or cousin of a high net worth individual. People like this want to be in the limelight, so they make up fabricated stories, and in actuality commit fraud by signing binding documents guaranteeing financing while in reality they cannot deliver what they are guaranteeing. The fact is, when you sign such a document in the State of California and you don’t have the capacity at time of signing to deliver what you are committing to, it is considered fraud. This is the law. In the case of Sonja Morgan, for whatever her reasons, she completely disregarded that fact. I would hope that any potential individuals who would have the same idea as Sonia Morgan will see that it can’t be easily done, without there being grave consequences.
PRDC: It is interesting, at the end when you come out the other side, people will say to you “how could you not know?’ You simply don’t. It’s not that producers like us are inexperienced and don’t perform the due diligence. When you have someone with this highly regarded reputation and they are using their husband’s name and financial background and reassuring you they are actually going to provide financing film, and you know that they have recently financed a movie, you have no reason not to believe them. If you were to count the number of people every day in this business who say they have financing for a film, they are a dime a dozen. In our case, we were relying on her and her husband’s financial background. She was the wife of John Adams Morgan, who is obviously a well-regarded expert in the banking business. She was also representing that he was a part of her production company and also served as a board member. Obviously his credentials could not be questioned.
RRDC: The point is that people come into the film business and get away with doing this all the time. We now know of other producers Sonja misled that were in our same situation, and they too wasted time, energy and lost credibility not to mention hundreds of thousands of dollars. In the end when she had to back up her commitments she had no intention of the means to finance any films and simply walked away.
TBOF: Having done this ten times, my question is does she own the assets? Is there any chance of her claiming that she has no assets?
RRDC: Mrs. Morgan testified under oath in court regarding her assets, and we have been advised that if she starts to move her assets or tries to hide them, she will be facing larger problems. We encountered a similar situation this summer with someone representing they were an investor who served on the Board of one of the top U.S. banks. This person supposedly had the backing of high net worth individuals from the baseball and music industries and was ready to invest. There were demands made of course: the person would receive a fee and credit, and his girl friend would have to be in the film. What is disturbing is the fact that they were represented by a very reputable talent agency. Together we all went through the negotiation process and in the end nothing ever materialized. Why do producers like us who are seeking money for films entertain meetings with these people? Because they are represented by top agencies in town. Yet in more cases than not these so-called investors don’t have the financing they are representing.
RRDC: I had to go with my hat in hand and explain to the parties involved and apologize, and show the paper trail of what had happened. I jumped on a plane and went to the State where the actor lives and personally apologized. This is what I needed to do, and thankfully he understood, and through his lawyer we were told that if the opportunity and right project comes along they would certainly consider working with us. Mind you, throughout these three years we have continued working while going through this process. It has not been easy.
PRDC: On top of everything, Sonja went even further in trying to stop the litigation by using her connections. She had a high profile financier in the industry call us to make us aware of how very powerful they were, and that if we didn’t stop the litigation, they would make sure no one in Hollywood would work with us. It took us a long time to rebound, and you really don’t know if that had any effect at all.
RRDC: What you just said is how I reacted. We received a phone call from a very well known financier in our industry. A representative of the company called and said: “My boss is a friend of Sonja Morgan, and it would be in your best interest to drop your lawsuit, or you will never work in this town again.” I told him: “You know, I am working an hour a week on the case, and after what you have just told me, I am making it my mission to work two hours a day, so tell her I will follow this to the end.” We immediately sent them a legal notice to cease and desist. In reality we should have also attached them to the lawsuit. After all, it was a phone call that lasted perhaps less than 15 minutes and it was my word against theirs. This demonstrates the perceived power these people think they wield. Instead of doing the right thing, they try to strangle you, try to make you give up your rights, and try to intimidate you.
In other Sonja Morgan news…
Her website shows very low traffic activity. She is also having problems with her “Sonja Morgan New York” trademark. Apparently, someone on he team dropped the ball when it came to the paperwork.