Home > News > Jim French Studios Attempts to Force COLT Into Chapter 7 • Bookmark   • Newsletters   • Register Search Options

NEWS STORY

Jim French Studios Attempts to Force COLT Into Chapter 7

Jim French Studios Attempts to Force COLT Into Chapter 7
Get XBIZ News
Sep 22, 2010 4:15 PM PDT    Text size: 
SONOMA, Calif. — Jim French Studios attorneys are attempting to force COLT Studio Group into Chapter 7 bankruptcy, XBIZ has learned.

Jim French Studios, operated by former COLT owner Jim French, says it hasn't been paid the bulk of a multimillion-dollar promissory note related to the sale of the company seven years ago and is attempting to take over the company as it controls the voting power of the unsecured class of creditors.

French attorneys allege in a motion made late last week that COLT's current Chapter 11 filing is faulty because the company cannot "effectively reorganize."

"No useful purpose will be served by maintaining the case in Chapter 11," French attorneys said in the motion. "As the court has already concluded, the confirmation of a Chapter 11 plan by the debtor is not practical or feasible, and there is no reasonable likelihood of rehabilitation."

French attorneys say that COLT is operating at at "continuing loss," particularly in light that the company owes more than $600,000 in unpaid taxes and that it is in the red by about $1 million.

They also say that current COLT operators John Rutherford and Thomas Settle attempted to use cash collateral to pay expenses without the court's permission.

In mid August, the U.S. Bankruptcy Court in Santa Rosa, Calif., in a contested evidentiary hearing, issued various interim orders restricting direct payments to Settle and Rutherford.

French attorneys in the motion say that Rutherford and Settle were restricted on the use of cash collateral after the court cut "their ability to pay their personal rent of $5,450 per month on the wine country mansion in which they reside."

In addition, French attorneys noted that COLT still hasn't allowed Jim French Studios to search business records at two COLT Bay Area premises, one in Sonoma, Calif., and the other in Boyes Hot Springs, Calif.

Jim French Studios was given the green light to search the records by U.S. Judge Alan Jarosolvsky, who will decide on the latest motion to convert COLT's bankruptcy case to Chapter 7 on Oct. 8.

Last month, French said that he was working with his attorneys to take control of COLT's assets. His comments were made after an initial ruling by Jarosolvsky.

In the statement to XBIZ, French said, “I am very pleased with a decision turning over the COLT brand and assets back into my control. I’ve spent the past several years fighting to get what I was rightfully owed, and in the end I have prevailed."

In the Chapter 11 filing, COLT’s parent, Prowest Media Corp., included assets of $105,000 and liabilities of $2.9 million.

Its largest creditor is Jim French Studios at $1.49 million, although the " validity of security interest is disputed," according to the filing.

Other creditors include Paladin Video Inc. at $282,000, Internap LLC at $30,000, Stan Loeb at $130,000 and the Internal Revenue Service at $632,000.

COLT noted that it had revenue from operations of $2.2 million in 2008, $1.6 million in 2009 and $433,000 in 2010 through June.

One potential asset COLT claimed is a pending matter against French for copyright and trademark infringement worth $2.5 million.

Attorneys for Jim French Studios and COLT weren't immediately available for comment at post time.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !

LEGAL PERSPECTIVES

Data Privacy Is Tightening Up in the E.U.

Have you begun preparing for GDPR? If you are like most, you haven’t even heard of GDPR, but also if you are like most, it is going to affect your business, starting May 25, 2018. The GDPR, or General... More »

Preventing Legal Problems Before They Start

Dentists typically recommend that a person’s teeth be cleaned every six months and that oral X-rays be taken at least once every year. Internists recommend that a person receive a physical examination... More »

Could Adult Content Be Banned?

Earlier this month, I met with the Free Speech Coalition’s board of directors for our annual review. Despite the headwinds our industry faces, politically and economically, we are, as an organization,... More »
XBIZ NEWSLETTERS
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.






POPULAR PRODUCTS & SERVICES
Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ World magazine, the industry's leading e-commerce trade publication, delivering in-depth coverage of the online, mobile and ancillary digital markets.

UPCOMING EVENTS

XBIZ Retreat

May 30 - Jun 03
Miami, Florida

XBIZ Miami 2017

May 30 - Jun 02
Miami, Florida

XShow 18+ 2017

Jun 01 - Jun 03
Moscow, Russia

Cam Summit

Jun 02 - Jun 04
Lloret de Mar, Spain
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!