TORONTO — Private Media Group has divested itself of its Sureflix Digital Distribution division, releasing the gay adult company to its original ownership as part of a settlement agreement.
The deal settles claims made by shareholders Eric Johnson, Erik Schannen and Michel Lozier alleging Private Media Group made material misrepresentations to induce the original owners into a deal to acquire it, as well as other allegations.
Sureflix of Toronto was acquired by Private Media Group in October 2009. Sureflix operates a network of gay pay-per-view VOD websites and supplies gay adult programming under the MaleFlixxx brand.
"Pursuant to the settlement agreement, the company transferred back to Messrs. Schannen, Lozier and Johnson all of the outstanding capital stock of [Sureflix]," Private Media Group said in a statement.
Private Media Group said that Johnson, who led Private during receivership, will remain as a director on the company's board.
In late May, Private Media Group also agreed to give up its GameLink division as part of a settlement deal with former Private Media Group CEO Ilan Bunimovitz and a number of investors.
Private Media Group transferred all of the outstanding stock in GameLink's operating parent companies ThinkForward Inc. and GreenCine Inc. to Bunimovitz, as well as investing shareholders Andrew Sullivan and Peter Marinac.
Both the GameLink and Sureflix settlement agreements culminate several years of wrangling in Nevada courts between Consipio Holding BV investors and Private Media Group. Plaintiff shareholders had claimed the company had been rocked by embezzlement, among other charges, from moves made by former CEO Berth Milton and former directors. In the end, the company changed its front office and board of directors.
Charles Prast, the current Private Media Group CEO, and Johnson both were unable to be reached for comment Monday evening by XBIZ.
