Supreme Court of New York Terminates Lawsuit against John Textor

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Court finds no evidence of fraud or misrepresentation by former CEO and confirms accuracy and fairness of Digital Domain financial disclosures

The Supreme Court of the State of New York ordered a convincing summary judgment in favor of John Textor, terminating a lawsuit against the former CEO of Digital Domain Media Group. The Court found no evidence of fraud or misrepresentation and confirmed that DDMG accurately disclosed its financial situation to investors. The Court further ordered the plaintiffs to reimburse Mr. Textor for his fees and court costs.

In her 26-page opinion, New York Supreme Court Judge Debra James ruled contrary to the investors’ claims, stating that the evidence “conclusively established” that plaintiffs were not misled and DDMG painted a realistic picture of the company’s financial situation in SEC filings. The Court further ruled that there was no evidence that Mr. Textor and the other defendants made false or misleading statements or misrepresentations of material facts.

The termination of the lawsuit against John Textor is a defeat for trial attorney Arthur Abbey, whose firm Abbey Spanier, LLP has filed thousands of lawsuits in the United States courts, often rounding up multiple plaintiffs, as in this case, to bring claims against company executives at the world’s largest corporations. The multiple actions brought by Mr. Abbey’s firm against John Textor, have been argued by Mr. Textor and the defendants to be ‘carbon copy’ lawsuits that made merit-less, sensational claims of fraud and wrongful conduct in court filings, and in the press, against a long list of individuals and Digital Domain defendants.

The case heard by the New York Supreme Court is a 2013 action by Iroquois Master Fund, et al vs. John Textor, et al, and represented the first opportunity for the Court to hear claims against DDMG management and directors. The plaintiffs’ attorneys asserted causes of action of fraud against the inside directors and various other claims against all defendants, including misrepresentation, negligence and breach of good faith and fair dealing.

The Court issued several key findings in the recent ruling that will likely impact the widely reported cases that were initiated against Digital Domain leadership. The Court found that Digital Domain accurately disclosed its financials, that the company offered no false financial projections, and that there was no evidence of any actual financial data that was undisclosed or falsified.

The Court further ruled that there was no evidence of false or misleading statements and that no misrepresentation of material facts may be attributed to Mr. Textor and the other defendants.

The Court ordered the Clerk of Courts to enter a final judgment in favor of Mr. Textor and the other defendants.

Reference Supreme Court of the State of New York, Index No. 651788/2013,

IROQUOIS MASTER FUND LTD. and
KINGSBROOK OPPORTUNITIES MASTER
FUND L.P. (Plaintiffs)
v.
JOHN C. TEXTOR, JONATHAN F. TEAFORD,
JOHN M. NICHOLS, KEVIN C. AMBLER,
JEFFREY W. LUNSFORD, CASEY L. CUMMINGS,
KALEIL ISAZA TUZMAN, JOHN W. KLUGE, SINGER LEWAK LLP,
PBC GP III, LLC, PBC DIGITAL HOLDINGS, LLC, PBC DIGITAL HOLDINGS II, LLC, PBC DDH WARRANTS, LLC, and PBC MGPEF DDH, LLC, (Defendants)

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