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QED Holdings Sues Former CEO Bill Block

QED Holdings has sued former CEO Bill Block for trademark infringement and unfair competition, alleging he illegally used QED’s assets for personal gain — an allegation that Block’s attorney has strongly denied.

In a lawsuit filed Wednesday in federal court in Los Angeles, QED Holdings alleged the financier and producer — who exited as CEO several months ago — had surreptitiously taken control of the Bruce Lee biopic “Birth of the Dragon” and Robert De Niro comedy “Dirty Grandpa.”

Block’s attorney Martin Singer of Lavely and Singer said the suit was “ridiculous” and stemmed from the plaintiffs becoming dissatisfied with the terms of their settlement agreement with Block after QED Holdings ran out of money last summer.

“We are very confident that we will prevail,” Singer told Variety.

The suit alleged Block had misused QED’s name and trademarks to establish and operate entities controlled not by QED, “but by Block personally.”

Block disclosed on Feb. 25 that he was in negotiations to exit from QED International, the production-sales-financing company he founded in 2002. He had joined with Kevin Frakes in October to form Merced Media, with $500 million raised from PalmStar Media Capital.

The suit alleged that Block formed QED Pictures “without authorization from QED” last August and used that entity to execute an agreement between QED Pictures and Chinese investors to provide $10 million in financing for “Birth of the Dragon,” with Block taking the $1 million down payment for himself.

Block and his partners announced in Cannes in 2012 that they had sold most of the assets of QED International to Media Content Capitol, headed by Sasha Shapiro and Anton Lessine. According to the suit, the sellers received 25% equity in the newly created QED Holdings.

“Among other things, QED Holdings, LLC, the plaintiff here, received all rights, title and interest to all of QED International’s motion pictures, including those produced, in progress, or in development,” the suit alleged. “QED has now discovered that, while Block was serving as QED’s CEO, he was actively and surreptitiously working to steal QED’s assets and leverage QED’s opportunities for his own personal profit.”

“QED’s inquiries into the nature of Block’s activities during the time he served as QED’s CEO are ongoing, and ascertaining the full extent of Block’s malfeasance is difficult for many reasons, including because Block controlled the company and was able to disguise his wrong doing and because Block has withheld from QED certain information he and others working with him used and generated while he served as CEO,” the suit goes on. “But, at least some of Block’s misdeeds have come to light.”

Singer told Variety that QED Holdings began running out of money in July after Sen. Roger Wicker, R.-Mississippi, asked U.S. Attorney General Eric Holder to investigate Anton Lessine’s father Mikhail Lesin — head of Russian media group Gazprom Media Holding — for alleged money-laundering.

He also said Block personally guaranteed a $650,000 loan to help finance “Dirty Grandpa” because QED Holdings was out of money and has paid producer fees of that amount to QED Holdings.

During Block’s tenure, QED financed Brad Pitt’s “Fury,” which performed well with worldwide grosses of over $200 million.

Steven Marenberg, Josh Gordon and Josh Geller of L.A. firm Irell & Manella are representing the plaintiff.

UPDATE, 5:22 p.m. PDT – Singer has issued a statement on behalf of Block:

 

The claims asserted against Bill Block by QED are ridiculous and have no merit, and we
are confident that my client will prevail on QED’s specious claims.
Nothing was done by Bill Block without the knowledge of QED’s attorneys and principals.
The fact is that since 2014 QED did not have the financial wherewithal to finance films
and in July 2014, its principals directed Block to shut down the company, release all
executives and extract the company from its office lease.
Bill Block went ahead and secured outside financing for, and packaged, Dirty Grandpa
with QED’s knowledge and consent. The claims related to Birth of the Dragon are also
false since Mr. Block does not have any money on that film and QED is aware of that
fact.
In October of 2014, Josh Grode, attorney for both QED and Mr. Block, approved Mr.
Block going to work at a new company (Merced Media) and was listed as Mr. Block’s
lawyer in the press release for that transaction. This is contrary to the allegations in
QED’s lawsuit.
At the same time that QED wanted to shut down its operations, it was reported in the
media that a US Senator wrote to the Attorney General of the United States in
requesting that the Department of Justice investigate Mikhail Lesin, the father of one of
QED’s principals, for alleged violations of the Foreign Corrupt Practices Act and
Anti-Money Laundering statutes.
Then, it was reported in the media in December of 2014 that the US Assistant Attorney
General had referred the request for investigation of the QED principal’s father to the
FBI and to the Criminal Division of the US Justice Department.
Also, in December of 2014, the deal for Mr. Block’s separation from QED was finished
and confirmed by all parties. The Russian principals of QED subsequently tried to
renegotiate their deal with Mr. Block. When they could not do so on terms to their
satisfaction, this absurd lawsuit resulted.
Bill Block stated: “I have all along been acting in the best interests of QED, our
filmmakers, our production partners and the employees of the company I founded. I’m
confident that I will be completely vindicated in this litigation.”

 

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