Fenton’s suit says he actually tried to pitch the deal to one A-list actor and a producer, without success. According to the suit, the goal of the arrangement was to take advantage of the company’s high stock multiple.

The cost to DMG would be hidden, while the money received would be booked as revenue. In exchange, the artist would give DMG $30 million over the same period. Under the terms, DMG would give the artist $45 million over three years. The suit also alleges that Mintz asked Fenton to propose an unusual deal to A-list actors, directors and producers. “Plaintiff’s responses to the SEC were in accordance with what he believed to be truthful at the time, although after seeing the reports of DMG’s troubles in China over the course of 2018, Plaintiff has reason to believe that pertinent information was deliberately withheld from him,” the suit states. The SEC ultimately decided not to pursue charges. Fenton states that he took the lead in defending the company and explaining the Chinese film business to the SEC, while the founders remained out of sight. The SEC was investigating whether DMG had bribed Chinese officials, including Han Sanping, then the head of the China Film Group. He states that he personally defended the company from an SEC investigation into potential violations of the Foreign Corrupt Practices Act in 2013.

Some Chinese employees of the company were listed as guarantors of $220 million in loans, the suit alleges.Ī former William Morris agent, Fenton worked at DMG for 17 years. The suit says that the founders also took on millions in debt to pay for experimental regenerative medical treatments. The suit alleges that the founders borrowed hundreds of millions of dollars secured by DMG stock and used the funds to buy a $20 million mansion in Beverly Hills, multiple airplanes, including a $30 million Bombardier jet, and luxury vehicles, including Rolls-Royces, Bentleys and Ferraris. Fenton’s suit claims that the founders “have fled China and left DMG’s presence in China in shambles, with hundreds of employees losing their jobs.” Fenton accuses the founders – Dan Mintz, Wu Bing, and Peter Xiao – of reckless risk-taking, and of engaging in complex financial maneuvering to get money out of China.

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