An October lawsuit filed by Mussnich and another by his brother-in-law Carlos Randolpho Gros in Brazil, alleged that Teixeira wooed well-to-do Brazilian investors through the years but the bulk of the funds he received, allegedly amounting to some $16 million, were unaccounted for, with no adequate documentation to show where they were spent, thereby accusing him of running a pyramid scheme.
In a motion filed Tuesday, just days before Christmas, Teixeira of RT Features, through law firm Glaser Weil, moved to dismiss the fraud lawsuit issued by Mussnich in a U.S. court.
“Those who live in glass houses should not throw stones,” his memorandum of points and authorizations begins, which is asserting that Mussnich had “received a five-year prison sentence from the Brazilian government for securities and tax fraud.” Mussnich, contacted by Variety, said the Brazilian Supreme Court had dismissed the case in 2009 and that Teixeira had also raised the same issue in their court case in Brazil as a distraction.
Mussnich now has until Jan. 4 to file a legal response. A hearing is scheduled for Jan. 25.
A settlement is likely being discussed as part of Teixeira’s motion to dismiss. Mussnich’s attorney, Michael Fasano declined to confirm whether his client was discussing the possibility of a settlement with RT Features. He did say, however, that Mussnich wants to be vindicated and would probably look to have the case fully prosecuted.
“I’m not looking to make any money out of this complaint. My main goal is to have RT Features audited; what I want is transparency,” said Mussnich. “Secondly, I want to alert other potential business partners in the U.S. so that they are aware who they are dealing with,” he added.
“‘After ‘Call Me By Your Name,’ I started putting pressure on him because I had lent him money to pay the screenwriter and three years later, once the movie had come out and had been successful, I wondered what had happened with that money because I never got anything back. I realized then that transparency wasn’t his cup of tea,” Mussnich continued.
“At the end of the day, when you’re doing business with someone, you need transparency. But he’s lost our trust because he’s always looking to borrow left and right to cover his negative cash flow and isn’t allowing any accounting audits; we have no idea what he’s been doing with funds,” said Mussnich.
In Teixeira’s countersuit, he makes a number of allegations against Mussnich, calling into question his financial history. Among the claims is that Mussnich held a position as the director of a Brazilian bank co-owned by his father-in-law, Francisco Gros, that was forced into liquidation while owing $6 million to another, state-backed bank. Teixeira also alleges that Mussnich orchestrated a broad-ranging scheme designed to avoid tax liability in Brazil
Teixeira also pointed out that investors in his films signed an agreement that in effect confirmed they were aware there were no assurances or guarantees of a return of investment in the high-risk business of film.
New York-born Gros has forged a career in the banking and energy sectors and is now a partner at renewable energy company, Grupo Gera. According to Gros, on August 3, 2016, Teixeira emailed him with a proposal to invest in Abbas Kiarostami’s project “24 Frames.” Gros sent him 200,000 Reales that same day and another 42,000 Reales on Aug. 5 — an investment worth approximately $75,000 at the time, he estimates.
Some two years later, Teixeira paid him back around $33,000 and another $19,000 in March 2019. “He still owes me more, plus interest and a return on my investment, be it positive or negative,” he said.
Gros’s main concern is not the return on investment but the transparency of RT Features. “My lawsuit in Brazil is valued at only $200. What I want to see is a balance sheet, a proper accounting of my investments,” he said.
L.A.-based Brazilian lawyer Fabio de Sa Cesnik, who represents Mussnich in other investments, commented: “All this is terrible for the reputation of Brazil.”
He explained that with Brazil’s state-backed film funds and incentives under siege by the Bolsonaro administration, more investors are looking to invest in international films. Mussnich had successfully convinced several others to invest in his films for years, especially after “Call Me By Your Name” won an Oscar.
“Few Brazilian films travel well so investors have viewed international films as more viable investments,” said De Sa Cesnik who suggested that perhaps some of them didn’t do sufficient due diligence on the projects that Teixeira had presented to them.
De Sa Cesnik is a founding partner of Iberoamerican media and entertainment law firm CQS|FV, which has just brought in key attorneys Maurício Fittipaldi, Ygor Valerio and Felipe Senna to join the firm.