×

Chris Fenton Files $30 Million Suit Against DMG Entertainment

Chris Fenton, the former head of DMG Entertainment’s motion picture group, has filed a $30 million suit against the company, accusing the founders of cutting him out of wealth generated by an IPO and then running the company into the ground.

Fenton left the company in February 2018, after helping to position it as a key distributor of U.S. studio films in China. In the lawsuit, he says he was fired after complaining that the founders had reneged on their promise to make him “rich” after the IPO of the Chinese portion of the group.

At one point after it was listed on the Shenzhen stock exchange in 2014, DMG was worth $5 billion. But the company’s stock has fallen sharply in the past year. Listed as Yinji Entertainment & Media Company, the company saw its shares close Tuesday at RMB3.53 apiece, giving a market capitalization of $930 million (RMB6.26 billion.)

Fenton’s suit claims that the founders “have fled China and left DMG’s presence in China in shambles, with hundreds of employees losing their jobs.” Fenton accuses the founders – Dan Mintz, Wu Bing, and Peter Xiao – of reckless risk-taking, and of engaging in complex financial maneuvering to get money out of China.

The suit alleges that the founders borrowed hundreds of millions of dollars secured by DMG stock and used the funds to buy a $20 million mansion in Beverly Hills, multiple airplanes, including a $30 million Bombardier jet, and luxury vehicles, including Rolls-Royces, Bentleys and Ferraris. The suit says that the founders also took on millions in debt to pay for experimental regenerative medical treatments.

Some Chinese employees of the company were listed as guarantors of $220 million in loans, the suit alleges.

A former William Morris agent, Fenton worked at DMG for 17 years. He states that he personally defended the company from an SEC investigation into potential violations of the Foreign Corrupt Practices Act in 2013. The SEC was investigating whether DMG had bribed Chinese officials, including Han Sanping, then the head of the China Film Group. Fenton states that he took the lead in defending the company and explaining the Chinese film business to the SEC, while the founders remained out of sight. The SEC ultimately decided not to pursue charges.

“Plaintiff’s responses to the SEC were in accordance with what he believed to be truthful at the time, although after seeing the reports of DMG’s troubles in China over the course of 2018, Plaintiff has reason to believe that pertinent information was deliberately withheld from him,” the suit states.

The suit also alleges that Mintz asked Fenton to propose an unusual deal to A-list actors, directors and producers. Under the terms, DMG would give the artist $45 million over three years. In exchange, the artist would give DMG $30 million over the same period. The cost to DMG would be hidden, while the money received would be booked as revenue. According to the suit, the goal of the arrangement was to take advantage of the company’s high stock multiple. Fenton’s suit says he actually tried to pitch the deal to one A-list actor and a producer, without success. An attorney for one of them told Fenton it did not “pass the smell test.”

Fenton was paid $1 million a year during his last five years with the company, though the suit states he was also owed bonuses and compensation from the IPO.

The suit quotes the founders as making various promises to Fenton following the IPO. In July 2015, for example, the founders flew by private jet to Milan for Wu’s birthday. At the event, Fenton says Wu told him, “The IPO made us rich, and you will be rich from it, too.” Those promises were never honored, the suit alleges.

“Plaintiff put his credibility and long-standing reputation on the line on a daily basis defending both DMG and the Founders from scrutiny by industry colleagues, the media, and both U.S. and Chinese government authorities,” the suit says.

Fenton is seeking at least $30 million in damages for breach of contract, constructive discharge, promissory fraud, and other claims.

Update: Friedemann Thomma, DMG’s attorney, calls the suit “frivolous.”

Chris Fenton’s frivolous suit against DMG Entertainment is a fabrication of his own imaginations. None of the claims asserted by Chris Fenton in the unfiled complaint have any merits. DMG is looking forward to defending this case to expose the true nature of Chris Fenton to the industry.”

“My client’s position is that Chris Fenton’s assertions in the complaint, published by Variety without proper fact checking, are factually wrong. Specifically, Chris Fenton had been a contracted employee by DMG Entertainment for four (4) years and not 17 years as he asserts. Chris Fenton’s contract was terminated due to his poor performance and asset mismanagement of investments which costs DMG millions of dollars. During his short tenure Chris Fenton was not tasked to work for Yinji Entertainment & Media Company, a Chinese publicly traded company. During his tenure he was paid an annual salary of $200,000 plus $800,000 per year for the purchase of his talent company. His contract did not promise him any bonus or other compensation other than his $200,000 annual salary. Chris Fenton also misled the company in the purchase of his talent company which dramatically underperformed his stated revenue projections.”

David Albert Pierce, Fenton’s attorney, says they’ll let the complaint speak for itself:

“DMG’s rebuttals are false,” Pierce says. “When they see the complaint, they’ll see the facts that rebut their statements today. DMG seems very reckless in their response and reckless is par for the course with them. We’ll let our allegations speak for themselves.”

More Biz

  • The dark Manhatten skyline, seen from

    StubHub Refunds $500,000 to Customers Shut Out by New York Blackout

    Saturday’s blackout in New York had an outsized effect on the city’s nightlife, with Madison Square Garden and the entire Broadway district seeing multiple shows cancelled due to the the power outage. As a result, StubHub has refunded more than $500,000 worth of tickets for cancelled events. According to a statement from the company, the StubHub [...]

  • Weapons Cache

    D.A. Files 64 Charges in Bel-Air Weapons Stockpile Case

    The L.A. County District Attorney’s office has filed 64 counts against Girard Saenz, the man who allegedly kept a stockpile of more than 1,000 weapons at a Bel-Air home linked to the Getty family. Saenz is accused of illegal possession of assault weapons, transferring handguns without a dealer license, possession of short-barreled shotguns, and possession [...]

  • 9-1-1: Angela Bassett in the series

    Fox Sees Primetime, Sports Ad Gains As TV Upfront Wraps

    Fox Corporation is the latest to benefit from stronger-than-expected trends in TV ad spending, as the company notched strong gains in advertising commitments for its next cycle of programming – its first since selling off a large chunk of its media assets to Walt Disney. Ad demand was stronger than many executives anticipated, according to [...]

  • BMI Promotes David Levin to Senior

    BMI Promotes David Levin to Senior VP of Digital Licensing

    BMI today announced that David Levin has been promoted to Senior Vice President of Licensing, effective immediately. In his newly expanded role, Levin is responsible for all of BMI’s domestic licensing and revenue generation, encompassing radio, television, digital media, cable, satellite and general licensing.  Levin, who will oversee teams in New York and Nashville, reports [...]

  • Warner Music Group Logo

    Warner Music Acquires Musical Theater Indie First Night Records

    Warner Music Group has acquired First Night Record, an independent record label for West End and Broadway musical theatre cast recordings. The company will be overseen by WMG’s Arts Music Division, led by President Kevin Gore. First Night co-founder John Craig will join the Arts Music team under a multi-year consulting agreement to identify and record musical theatre productions in [...]

  • Woodstock 50 to Hold Open House

    Woodstock 50 to Hold Open House for Local Residents Before Permit Review Tuesday

    If nothing else, the producers of Woodstock 50 are persistent. After two permit applications to hold the troubled festival at the Vernon Downs racetrack in Upstate New York were rejected by the town of Vernon codes office, the producers and venue owner Jeffrey Gural today invited the local community “to embrace the Festival’s spirit of [...]

  • ILM Star Wars The Force Awakens

    ILM to Open Latest Effects Facility in Sydney, Australia

    Sydney, Australia, is to be home to Industrial Light & Magic’s fifth production hub. The Disney-owned special effects company currently has facilities in San Francisco, Vancouver, London and Singapore. The decision to open the Sydney outpost was announced Monday local time by executive creative director and head of ILM Rob Bredow, ILM executive Luke Hetherington, [...]

More From Our Brands

Access exclusive content