In an unusual move, federal prosecutors have agreed to name the CFO of Red Granite Pictures as an “independent” fiduciary overseeing the company, while both sides seek to settle a massive corruption case.
Red Granite is accused of using funds stolen from 1MDB, a Malaysian development fund, to finance “The Wolf of Wall Street,” “Dumb and Dumber To,” and “Daddy’s Home.” The company’s CEO, Riza Aziz, is the stepson of the Malaysian prime minister. Prosecutors are seeking to seize Red Granite’s profits from the films on behalf of the Malaysian people.
In total, the government alleges that $4.5 billion was looted from 1MDB to buy a yacht, luxury real estate, jewelry, and fine art. Last week, the government gave notice that it would seek to put the civil forfeiture cases on hold so as not to jeopardize the cooperation of foreign law enforcement agencies in an ongoing criminal probe.
The government and Red Granite agreed in July to appoint “Looper” producer Douglas Hansen as an independent operational fiduciary for a period of at least 30 days. The purpose was to provide oversight of the company and help maximize the value of its assets. Red Granite is working to release a remake of “Papillon” starring Charlie Hunnam.
Thirty days later, Hansen has been excused from the job. Reached by phone, Hansen declined to discuss the move in detail. “It’s not a negative,” he said.
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In a filing over the weekend, federal prosecutors agreed to name Randall Hermann, Red Granite’s CFO since August 2012, to succeed Hansen as the new “independent” fiduciary. The U.S. Attorney’s office declined to comment on the move.
“It’s extremely abnormal to leave an executive of a company permeated by fraud in charge as your fiduciary,” said attorney Lucas Rowe, a former federal prosecutor and an expert on asset forfeiture.
In a joint stipulation, Red Granite and prosecutors stated that Hermann will facilitate ongoing settlement talks and support Red Granite’s continuing operations. Red Granite has maintained that it did not knowingly receive stolen funds.