Time Warner took a stake in Maker last December, leading a round of investment worth $36 million.
In the lawsuit, Zappin and three other plaintiffs — Scott Katz, Derek Jones and Will Watkin — are claiming concealment of secrets, breach of fiduciary duty and constructive fraud. According to the suit, Maker Studio’s new board diluted the common stock in favor of preferred stock, including to regulate the common stock to minority status, for the purpose of electing director seats and “ousting Zappin as Maker CEO.”
Maker Studios and other defendants “conspired and agreed to use their power to line their pockets with Maker’s assets, to deny Mr. Zappin, Maker’s then chief executive officer (‘CEO’), of all of his powers, and to gut the rights of common stock shareholders to control Maker and its corporate activities,” according to the lawsuit.
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Zappin and the other three are requesting a temporary restraining order, a constructive trust over Maker Studios and removal of the current board of directors. In addition, the lawsuit seeks unspecific monetary damages.
Defendants named in the suit are Kreiz, Ben Donovan, Lisa Donovan, Mark Suster, Dana Settle, Rachel Lam, Michael DiSanto, GRP Partners, Mida Holdings California and Angulo Investors, and names corporate nominal defendant Maker Studios.
Zappin, in a statement provided by Maker Studios when it announced the change in his status last month, said: “I recognize that as we enter into our next phase of growth, we need additional leadership. After a year of working together closely I feel confident that Ynon is the right person to take Maker to next level. He has the rare combination of having worked with great talent and having scaled large media companies.”