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Private to Pay Off Litigating Shareholders' Legal Fees

Private to Pay Off Litigating Shareholders' Legal Fees
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May 29, 2012 8:45 PM PDT    Text size: 

BARCELONA — Private Media Group plans on paying off the legal fees of shareholders who sued the company after alleging claims of embezzlement and mismanagement by its former front office.

The long-running legal saga waged by Consipio Holding and other shareholders was ordered dismissed last week in Nevada by Clark County Judge Elizabeth Gonzalez.

Private Media Group this evening filed papers with federal regulators that assert the adult entertainment company will reimburse Consipio Holding BV and Tisbury Services Inc. shareholders for their attorneys fees and costs incurred "in an amount to be agreed between the plaintiffs and the company and approved by the company’s board of directors."

The legal fee amount, which wasn't disclosed, is significant because the case dragged on 19 months, involved claims and counterclaims and included three appeals to the Nevada Supreme Court. 

“The Nevada action was a shareholder derivative suit brought on behalf of Private by its shareholders against third parties, namely management assisted by certain directors," Private CEO Charles Prast told XBIZ. "The suit contained multiple allegations which are all of public record. It is standard practice for the legal bills of the party who beings such an action successfully to be met. This is the case here.We are glad to have this action behind us and resolved for the benefit of all shareholders.”

Private Media Group, a public company trading over the counter, had been embroiled in the suit pitting shareholders — led by Consipio Holding BV, Tisbury Services Inc., shareholder Claudio Gianascio and shareholder, former CEO and now board director Ilan Bunimovitz — against front-office management, including Berth Milton, who was eventually ousted as CEO.

The plaintiffs claimed the company had been rocked by embezzlement, among other charges, from moves made by Milton and former directors.

In the end, the company changed its front office and board of directors.

 Prast in March took the top slot held by Private Media Group's Sureflix division's president, Eric Johnson, who had been carrying out the responsibilities of CEO and CFO during the long and contentious shareholder and creditor-rights battle. Johnson had been appointed as receiver by a Nevada court last year.

In January, Private Media Group announced the election of the company’s new board of directors to include Johnson, Bunimovitz, Anna Maksimova, Michael Martinez, James McCormick and Prast, who now acts as the company’s president, CEO and interim CFO.

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