Yahoo Finance Producer Jason Cloth Steps Away From Company Amid Fraud Allegations
Jason Cloth, a Canadian financier with executive producer credits on dozens of films such as Joker, Licorice Pizza and the upcoming Mission: Impossible movie, is out as co-head of C2 Motion Picture Group as he fields allegations of fraud on a number of projects.
The announcement that Cloth stepped down, made on Tuesday, comes less than a week after a Florida jury found that he defrauded an investor out of millions of dollars for the production of a slate of movies, including Ghostbusters: Afterlife, Monkey Man and NBA docuseries The Pathway. Cloth, who didn’t mount a defense in the trial, was ordered to pay roughly $19.6 million. Since 2021, he and his former financing company Creative Wealth Media have been named in at least four lawsuits, two of which have since been voluntarily dismissed, accusing him of making false statements to solicit investments and loans that he allegedly failed to repay.
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Dave Caplan took over as sole CEO of C2 months ago after sharing the position with Cloth, who cofounded the company in 2022, according to the company. C2 has cofinanced a range of studio movies, including Mission Impossible: Dead Reckoning, Transformers: Rise Of The Beasts and Dungeons & Dragons: Honor Among Thieves.
“When Dave and I founded this company, we had a shared vision for the types of successful movies we hoped to make and the kind of company we wanted to build,” Cloth said in a statement. “This move simply reflects what the reality on the ground has been for several months – and I know C2 could not be in better hands.”
In a statement, Caplan said, “I am proud of what we have built at C2 over the past two and a half years, and I look forward to this next chapter of the company. Jason was an integral part of the creation of C2 and remains a close friend.”
Creative Wealth was the primary financier for Canadian production and finance company Bron Studios, which garnered 30 Oscar nominations and six wins across various films it financed or produced over the years. The Aaron Gilbert-led outfit has also been accused of widespread fraud in lawsuits. The studio filed for bankruptcy last year, citing headwinds within the industry. It had roughly $148 million in assets, with nearly $420 million in liabilities from outstanding loans.
In January, Creative Wealth was granted the majority of Bron’s remaining assets in bankruptcy proceedings, according to court documents. They include the studio’s interest in several films, as well as projects in development. It was owed more than $350 million.
“The collapse of Bron was a terrible shock and negatively impacted hundreds of people,” Cloth said. “We are pleased that the Court recognized how Creative Wealth was affected by Bron’s actions and has decided to award us control of its surviving assets. We are determined to do whatever we can to identify what value remains and then setting about unlocking it.”
Cloth, who declined to comment on accusations of fraud, has attributed failures to repay investments and loans to Bron’s bankruptcy.
Last week’s $19.6 million verdict stems from allegations that Cloth failed to repay $6 million in loans from Robert Harris’ Florida-based investment companies for the production of seven films. According to the complaint, Harris was told that he would be repaid in full, plus 15 percent interest. In a 2021 email, Cloth allegedly said that loans for the development of projects would be paid back by the end of the year “worst case,” and that there was no risk associated with the loans. Months later, he falsely claimed that The Pathway (which aired on TNT in 2022) had been greenlit for five seasons, the lawsuit alleged.
None of the loans have been paid back, according to court documents.
William Fried, a lawyer for Cloth, said the verdict will be appealed. “We believe there were significant errors made by the Court – including refusing a continuance so that we could appear on behalf of Mr. Cloth at trial – which warrant a reversal,” he added.
In March, a proposed class action was filed in Illinois state court accusing Cloth of defrauding investors out of more than $80 million by raising funds before shuffling their investments around various entities to repay outstanding loans.
The lawsuit claimed that Cloth raised tens of millions of dollars for several movie and TV titles from 2019 to 2023 on behalf of Bron, Creative Wealth and C2. Investors were allegedly promised repayment based on the success of specific projects and knew that they would not be paid back if they were not profitable. The lawsuit detailed the funding apparatus of several titles investors put money into.
This includes Ghostbusters: Afterlife, which counts Bron as a financial backer. Despite the film grossing roughly $205 million at the box office on a $75 million budget, investors were not paid back, according to the complaint.
“Ghostbusters repayment is imminent, so we will have that out in the next few business days,” wrote Maraboyina Capital, an intermediary that brokered the investments on behalf of Creative Wealth, in a 2022 email to an investor.
The list of films allegedly used as vehicles to defraud investors included Monkey Man, which was made for roughly $10.5 million. Cloth had said he had a deal with Netflix to nab rights to the movie for $34 million, according to the lawsuit. Universal, however, ended up distributing that movie. “Cloth claimed that Creative Wealth actually received 25% of Monkey Man’s net profits in compensation for a $6,500,000 loan,” the lawsuit said.
In a July 2023 meeting with investors, Cloth attributed investment failures to Bron’s bankruptcy, the lawsuit said. He allegedly claimed that they would be paid based on the success of C2’s stake in Mission: Impossible.
Four months later, Creative Wealth filed for bankruptcy in Canada. It listed roughly over $100 million in liabilities. The proposed class action claimed that investors will not be made whole in bankruptcy, because the company transferred its assets to C2, which was allegedly used as a vehicle for Cloth to invest more than $100 million into Mission: Impossible — Dead Reckoning Part One, Transformers: Rise Of The Beasts, Dungeons & Dragons: Honour Among Thieves and Babylon.
Bron’s business spanned film, TV, animation and gaming. It was a co-financier on a number of high-profile projects under a $100 million deal with Warner Bros. Pictures. Its financing activities were conducted through Bron Creative, a joint venture with Creative Wealth. In 2021, the entities were sued by New York-based financier Hudson Private over $17 million in unpaid loans for films such as Bombshell, Capone and Greyhound, though Cloth was dismissed as an individual defendant in the case. Creative Wealth was hit in March with a nearly $27 million judgment.
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