Investors sue Rob Schneider over alleged misuse of post-production funds

The movie star and former "Saturday Night Live" cast member Rob Schneider is being sued by two investors, according to the Courthouse News Service. The plaintiffs claim that Schneider did not use the funds they invested appropriately, explaining that the money was meant to be spent on the post-production of the movie "The Chosen One."

The investors George and Nancy Gamble funded the project that the movie star and his brother John Schneider claimed to have undertaken through a $1.5 million investment. However, the plaintiff's claim states that the two men spent the money on "unrelated, improper and/or personal purposes."

"[The defendants] led plaintiffs to believe that their investment was safe and would be profitable," the Gambles claimed in their filed lawsuit. "[However, they] did not describe to plaintiffs any risks of this investment – either orally or in any prospectus, offering memoranda or other writing."

Furthermore, the negotiation between the investors and the entertainment professionals allegedly entitled the plaintiffs to receive their $1.5 million back by an income from any organization connected to the making of the movie. The suit claims that no portions of the invested money was used in post-production work and the movie still remains uncompleted.

Small to midsize businesses (SMBs) must be especially careful when negotiating with investors or shareholders, as a large dispute and lawsuit could lead the company to lose their financial footing.

One way to make sure a shareholder has this type of power over a company is to develop a shareholder or partner buy-out agreement which essentially allows a company to buy-out the investor at a fair price.

Arizona-based companies would be wise to consult experienced attorneys at a law firm in Phoenix whenever a dispute with an investor arises.

Categorised in: Uncategorized

This post was written by