PULLMAN GROUP
FILES
MULTIBILLION LAWSUIT
Press Release
November 14, 1999
The Pullman Group, LLC files multi-billion dollar
lawsuit in total claims against Prudential Insurance Co., Prudential Investments
Corp., Prudential Securities Inc., Rascoff/Zysblat Organization Inc.,
Entertainment Finance International, LLC, Willkie, Farr & Gallagher,
CAK/Universal Credit Corp, and UCC Lending Corporation.
The Pullman Group,
LLC v. Prudential Insurance Co., Prudential Investments Corp., Prudential
Securities Inc., Rascoff/Zysblat Organization Inc., Entertainment Finance
International, LLC, Willkie, Farr & Gallagher, CAK/Universal Credit Corp.,
and UCC Lending Corporation. Index No. 99/605210 (N.Y. Sup. Ct., New York County
filed November 16, 1999).
The Pullman Group, LLC filed a lawsuit, November 16, 1999 against Prudential
Insurance, Prudential Investments, Prudential Securities, Rascoff/Zysblatt
Organization Inc. (an entertainment accounting firm controlled by principals Joe
Rascoff and Bill Zysblatt), Entertainment Finance International, LLC (the
venture formed by Prudential Investments and Rascoff/Zysblatt Organization Inc.)
Willkie, Farr & Gallagher, and CAK/Universal Credit Corporation and UCC
Lending Corp., both headed by Charles A. Koppelman for total claims of over $2
billion plus $500 million in punitive damages for over[25] counts and causes of
action, including breach of contract, breach of fiduciary duty, misappropriation
of trade secrets, conversion, tortious interference, and unjust enrichment.
The Pullman Group, LLC filed an approximately 100 page complaint against
the parties today in the Supreme Court of New York.
The specific claims against the defendants are: Breach of contract against
Prudential Insurance/Prudential Investments for $100 million; Breach of contract
against Willkie, Farr & Gallagher for $100 million; Breach of fiduciary duty
against Willkie, Farr & Gallagher for $100 million; Breach of fiduciary duty
against Rascoff/Zysblatt Organization Inc. for $100 million; Misappropriation of
trade secrets against Prudential Insurance and Prudential Securities for $100
million; Misappropriation of trade secrets by Willkie, Farr & Gallagher for
$100 million; Misappropriation of trade secrets by Rascoff/Zysblatt Organization
Inc. for $100 million; Misappropriation of trade secrets against CAK/Universal
Credit Corporation and UCC Lending Corp. for $100 million; Misappropriation of
Trade Secrets against EFI for $100 million; Conversion against Prudential
Insurance, Prudential Investments, and Prudential Securities for $100 million;
Conversion against Willkie, Farr & Gallagher for $100 million; Conversion
against Rascoff/Zysblatt Organization Inc. for $100 million; Conversion against
CAK/Universal Credit Corporation and UCC Lending Corp. for $100 million;
Conversion against EFI for $100 million; Unjust enrichment against Prudential
Insurance, Prudential Investments, and Prudential Securities for $100 million;
Unjust enrichment against Willkie, Farr & Gallagher for $100 million; Unjust
enrichment against Rascoff/Zysblatt Organization Inc. for $100 million; Unjust
enrichment against EFI for $100 million; Promissory Estoppel against Prudential
Insurance and Prudential Investments for $100 million; Breach of Duty to
Negotiate in Good Faith by Prudential Insurance and Prudential Investments for
$100 million; Misrepresentation against Rascoff/Zysblatt Organization Inc. for
$100 million; and for permanent injunctive relief.
The Pullman Group, LLC, the pioneer and foremost purveyor of entertainment and
intellectual property securitizations (creator of all "Pullman Bonds™
", including the first ever "Bowie Bonds™"), today instituted a
lawsuit against several of the key players in a joint venture conceived by David
Pullman, Founder, Chairman and Chief Executive Officer of The Pullman Group, LLC
to finance a series of celebrity bond issuances, similar to the bonds the
Pullman Group has created and successfully completed for David Bowie, James
Brown, Edward Holland, Brian Holland, Lamont Dozier (of Holland-Dozier-Holland),
and Ashford & Simpson. In the complaint, The Pullman Group alleges
that Prudential Insurance and its subsidiary, Prudential Investments Corp.,
which were to provide funding for the joint venture, and Rascoff/Zysblat
Organization Inc., then an entertainment business management firm and The
Pullman Group's partner in the enterprise (now a division of Provident/American
Express), which was to make its client base available as potential clients of
the joint venture, misappropriated plaintiff's unique proprietary information,
trade secrets and expertise and repudiated their contractual and fiduciary
obligations to The Pullman Group, when they improperly and abruptly ceased their
affiliation with The Pullman Group by reneging on their agreement and, barely
ten days later, consummated precisely the same deal between themselves as a
purportedly new joint venture. The complaint describes the venture as,
"A transaction that only could be consummated by the blatant
misappropriation of Pullman¹s trade secrets and proprietary information, which
were disclosed in the strictest of confidence in connection with Prudential¹s
purchase of Pullman¹s Bowie Bonds™ and during the course of Prudential¹s
breach of the agreement between it and The Pullman Group." Prudential
and Rascoff/Zysblatt Organization Inc. arranged this all with the assistance of
plaintiff¹s attorneys, Willkie, Farr & Gallagher, who are also named in the
lawsuit as defendants.
Rascoff/Zysblatt Organization Inc., had, in the course of its dealings with The
Pullman Group, and its predecessor, the Structured Asset Sales Group of
Fahnestock & Co., Inc.(collectively known as "The Pullman Group")
misled its partner all along. The complaint reads, "In blatant breach
of its fiduciary obligations, however, Rascoff/Zysblatt Organization Inc. failed
to disclose to The Pullman Group that it was in imminent danger of losing and in
fact later lost many of its most celebrated clients, including the Rolling
Stones, Patti Smith, and Paul Simon, because of growing dissatisfaction on the
part of such clients with the manner in which Rascoff/Zysblatt Organization Inc.
had been managing their business and related affairs. The Plaintiff only later
found out that in past years Rascoff/Zysblatt Organization Inc. had lost
prominent clients, having been let go by groups such as Duran Duran, the Elvis
Presley Estate, and Leiber & Stoller.
In the absence of such an egregious breach of its fiduciary duties by
Rascoff/Zysblatt Organization Inc. in failing to disclose the precarious status
of its client base, The Pullman Group would not have offered Rascoff/Zysblatt
Organization Inc. a partnership interest, but rather would either have offered
Rascoff/Zysblatt Organization Inc. a significantly reduced position or have
chosen to forgo Rascoff/Zysblatt Organization Inc.¹s participation entirely and
have merely retained an outside accounting firm to perform the ministerial
accounting, royalty auditing and administrative services on an hourly basis with
a cap for fees.
The Pullman Group, LLC additionally charges that Prudential Securities Inc., a
subsidiary of Prudential Insurance, misappropriated proprietary and confidential
information belonging to The Pullman Group to form and finance yet another
entity, defendant CAK/Universal Credit Corporation headed by Charles A.
Koppelman to compete directly against The Pullman Group. According to the
complaint, since its improper creation, CAK has attempted to disrupt
pre-existing relationships between The Pullman Group and its current and
potential clients and to usurp potential business opportunities that otherwise
could have been realized by The Pullman Group. The complaint states, among
other things, "Prudential Securities representatives, working in concert
with CAK, proceeded knowingly, willfully, intentionally and tortiously to
interfere with The Pullman Group, LLC. relationships with its clients,
including Edward Holland, Jr., Lamont Dozier, and Brian Holland, the Motown hit
machine Holland-Dozier-Holland, and Nickolas Ashford and Valerie Simpson of the
R&B legendary songwriting team, Ashford & Simpson, by attempting to
entice them to violate their contractual commitments to Mr. Pullman, agreements
that were matters of public record and certainly were known to Prudential
Securities, its affiliates, CAK."
Willkie, Farr & Gallagher is named in the complaint based on its breach of
its fiduciary duties to The Pullman Group. The complaint states, "In
blatant disregard of its fiduciary duties to Mr. Pullman and The Pullman Group,
defendant WFG [Willkie, Farr & Gallagher] and its partners, Dick
Rudder and Richard Sammis, represented defendants Rascoff/Zysblatt Organization
Inc. and Prudential in the formation of their joint venture, Entertainment
Finance International, ("EFI"), to the direct detriment of WFG¹s
original client The Pullman Group and its predecessor, the Structured Asset
Sales Group of Fahnestock & Co., Inc. In breach of its obligations to
preserve the secrets and confidences of Mr. Pullman, WFG utilized Pullman¹s
proprietary and confidential documents and trade secrets to effectuate the
creation of EFI."
The Pullman Group¹s founder, chairman, and CEO, David Pullman, is well known
internationally as the individual who originated and created the groundbreaking
idea of combining the sophisticated financing mechanism of asset-backed
securitization with the creative assets of artists in the entertainment
industry. David Pullman conceived of and created the first-ever
entertainment and intellectual property securitization -- the original
"Bowie Bonds"™ -- which resulted in a $55 million private placement
secured by the royalty stream from the music catalogue of rock star and composer
David Bowie. Bowie Bonds™,the first in a series of Pullman creations
known as Pullman Bonds™, are secured by the future stream of income generated
by various intellectual property rights, including the song writing, publishing
and recording royalties earned by artists in the music industry as well as the
list of asset types, such as future royalties from film and television
libraries, television syndication, licensing, and animation libraries in
addition to music royalties, sports, designer license streams and other
entertainment and intellectual property royalty streams devised by The Pullman
Group. This revolutionary concept allows artists to retain ownership and
control of their copyrights while at the same time allowing them to realize
substantial revenue from those assets, thereby avoiding the concessions and loss
of control demanded by major labels providing advances to the artist,
traditionally the only way that artists could realize present value for their
copyrights. As a consequence, the new financing also served to empower the
artists and creators against the all-too-powerful media companies that dominate
the music, entertainment and intellectual property industries.
The Pullman Group®, as principal, specializes in financing and securitizing
music publishing, writer¹s share record masters, artist and record royalties,
film and television libraries, TV syndication, literary estates and other
entertainment and intellectual property royalties. David Pullman,
Founder/CEO of The Pullman Group, still remains the only financial professional
who has ever completed such groundbreaking deals based on future entertainment
royalties Pullman Bonds™ and has 100% market share. His asset backed
securitization deals include the famous $55 million Bowie BondsTM transaction,
the $30 million deal with Holland Dozier Holland (Motown Hit Machine), another
eight figure deal with R&B greats Ashford & Simpson and the $30 million
deal with "Godfather of Soul" James Brown. The Pullman Group¹ s
experience includes well over $1 billion in transactions through 1999. The
Group¹s website is www.pullmanco.com
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