Case 4:14-cv-00240-WTM-GRS Document 1 Filed 11/06/14 Page 1 of 14

u.sJ
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION

,_

tI

MERCHANT IVORY PRODUCTIONS

(USA), INC. and JAMES IVORY,

SO.

Case No.

CV414-240

JOHN GILBERT DONALDSON, JR.

a/k/a GIL DONALDSON,
Defendant.
COMPLAINT
NOW COME Plaintiffs Merchant Ivory Productions (USA) Inc. ("MIP USA") and James
Ivory ("Ivory") (together with MIP USA, the "Plaintiffs") and for their Complaint against
Defendant John Gilbert Donaldson, Jr. a/k/a Gil Donaldson ("Donaldson" or "Defendant"),
alleges on their own knowledge or otherwise upon information and belief as follows:
NATURE OF THE CASE
1.

This is an action for breach of fiduciary duty, an accounting and misappropriation

of corporate assets. Summarily, Defendant as a director of Merchant Ivory Productions S.a.r.L.

("MIP France") and the manager of its day-to-day operations was tasked with overseeing the
sales of an apartment and office that were both owned by MIP France and were located in Paris,
France. Although the apartment and office were sold Defendant failed, despite repeated
demands, to provide any accounting or other information to show how the sales proceeds were
distributed. To make matters worse, upon information and belief, Defendant misappropriated
certain of the sales proceeds for his own personal use by way of cash withdrawals, wire transfers

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Plaintiffs,
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to what is believed to be his bank account in Georgia and checks written to himself and other
individuals, which checks were drawn on MIP France's bank account.
JURISDICTION AND VENUE
2.

Defendant is subject to personal jurisdiction in this State as Defendant is a part-

time resident of the State of Georgia and regularly transacts business in this state.
3.

Venue and jurisdiction is proper in this Court as Defendant is a resident of

Chatham County, Georgia. Moreover, upon information and belief, certain misappropriated
funds at issue in this litigation were sent to Georgia.
PARTIES
4.

Plaintiff MIP USA is a limited liability company organized pursuant to the laws

of the State of New York, with its principal place of business located in New York, NY.
5.

Plaintiff James Ivory is an individual who resides in the City and State of New

6.

Defendant John Gilbert Donaldson, Jr. a/k/a Gil Donaldson, is an individual who

York.

resides in both the State of Georgia and Paris, France. Defendant's Georgia residence is located
at 108 Schooner Drive, Savannah, GA 31410. Upon information and belief, Defendant splits his
time between his Savannah and Paris residences and is in Savannah as of the date of this
Complaint.
FACTUAL ALLEGATIONS COMMON TO ALL CLAIMS
Background
7.

Plaintiffs repeat and re-allege the allegations of paragraphs 1 through 6 above as

though set forth fully and at length herein.

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8.

MIP France is a socit

responsabilit limite (a limited liability company)

organized under the laws of France, with its principal place of business located in Paris, France.
9.

Merchant Ivory Productions (UK) Ltd. ("MIP UK") is a private limited liability

company organized under the laws of the United Kingdom, with its principal place of business in
London, England.
10.

MIP USA owns 40% of MIP France.

11.

MIP UK owns 60% of MIP France.'

12.

Plaintiff Ivory is the beneficial owner of MIP UK and MIP USA. Thus, by virtue

of MIP UK and MIP USA's shared ownership of MIP France, Ivory is the beneficial owner of
MIP France.
13.

MIP is an independent film company that has made numerous films under the

brand name "Merchant Ivory" or "Merchant Ivory Productions". MIP has created and produced
numerous classic films, including Howard's End, A Room With a View, The Bostonians and
Quartet, to name only a few.
14.

Since at least 2008, Defendant was a grant (director) of MIP France and was co-

director with Ivory until 2013

15.

Defendant's responsibilities included managing MIP France's day-to-day

operations, which responsibilities were limited given that MIP France's primary assets were the
Paris office and apartment owned by MIP France.
The Paris Real Property

16.

Plaintiffs repeat and re-allege the allegations of paragraphs 1 through 15 above as

though set forth fully and at length herein.

1

Collectively, MIP UK, MIP USA and MIP France will be referenced hereinafter as

"MIP".
'I

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17.

MIP France has long-owned an apartment in Paris (the "Paris Apartment"). The

Paris Apartment was located at 21 Rue Bonaparte 75006 Paris, France.

18.

MIP France has also long-owned an office in Paris (the "Paris Office") (together

with the Paris Apartment the "Paris Real Property"). The Paris Office was located at 18 Rue
Montmarte 75001 Paris, France.
19.

In or around late 2008 to early 2009, Ivory decided to have MIP France sell the

Paris Real Property. To accomplish this task, Defendant, given his part-time residence in France,
was responsible for showing the apartment to brokers and coordinating any prospective sale.
20.

On May 20, 2009, MIP France entered into a contract for sale of the Paris Office.

The sales price for the Paris Office was approximately 340,000, which based on the conversion
rate applicable at that time is equal to $472,600.00.
21.

In or around March 2010, MIP France entered into a contract for sale of the Paris

Apartment. The sales price for the Paris Apartment was approximately 2,900,000.00, which
based on the conversion rate applicable at that time is equal to $3,886,000.00 (together with the
sale of the Paris Office, the "Sales Proceeds")
22.

Large portions of the Sales Proceeds were used to pay off certain of MIP France's

creditors.
23.

However, after paying such creditors, there should have been a remaining balance

of, upon information and belief, approximately $650,980.05.

24.

Following the sale of the Paris Apartment in March of 2010, on numerous

occasions MIP USA made repeated requests of Defendant to provide a full accounting of the use
of the Sales Proceeds.

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25.

Defendant promised to provide an accounting and other financial information

including bank statements with respect to the Sales Proceeds.

26.

Without providing any such accounting or bank statements, at one point

Defendant told Ivory that the French Government took the balance of the Sales Proceeds.
Defendant did not produce any documentation to support this assertion.
27.

Despite further repeated requests, Defendant could only then claim that certain

bank statements were never received from the bank. The Defendant failed to provide any
accounting information or bank statements and in fact ceased all communications with MIP.
Defendant's Misappropriation of Funds from the Bank Account

28.

Plaintiffs repeat and re-allege the allegations of paragraphs 1 through 27 above as

though set forth fully and at length herein.

29.

In his capacity as a director of MIP France, Defendant was a signatory to MIP

France's bank account, held with HSBC France (the "Bank Account")
30.

After Defendant ceased communications with MIP, MIP France retained the

services of local counsel in Paris ("Local Counsel") to obtain copies of the Bank Account's
monthly statements from HSBC France, because Defendant failed and refused to provide bank
statements or any other accounting information.
31.

In July 2013, after numerous requests for statements from HSBC France, Local

Counsel received copies of the Bank Account's monthly statements (the "Statements"). The
Statements revealed that Defendant misappropriated a substantial amount of MIP France's funds.
32.

The full scope of Defendant's misappropriation was not revealed until after Local

Counsel obtained copies of the Bank Account's cancelled checks (the "Cancelled Checks"). The

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Cancelled Checks revealed that Defendant misappropriated even more money than originally
discovered.
33.

After reviewing the Statements and the Cancelled Checks, Plaintiffs learned

Defendant wrote checks to himself, withdrew cash and, upon information and belief, issued wire
transfers to his bank account held with the Savannah Bank from MIP France's Bank Account
(the "Misappropriations"). In total, Defendant's Misappropriations equal at least $260,889.89.
34.

Together with the known Misappropriations, there were additional wire transfers

and disbursed checks issued from the Bank Account to unknown individuals and unknown
entities in the amounts of approximately $188,536.25 and $340,478.97, respectively.
35.

Despite repeated requests, Defendant has refused to provide any explanation with

regard to the additional wire transfers and disbursed checks issued from the Bank Account to
unknown individuals and unknown entities.
36.

After Defendant failed to provide any response to requests for information

regarding the first discovery of his misappropriations, on October 15, 2013, MIP USA sent a
formal demand letter to Defendant (the "Demand Letter"). A copy of the Demand Letter is
annexed hereto as Exhibit A. To date, Defendant has not complied with the demands set forth in
the Demand Letter or any of Plaintiffs' requests for information. In fact, Defendant has cut off
any and all communication with MIP.
AS AND FOR A FIRST CAUSE OF ACTION
(Breach of Fiduciary Duty against Defendant)
37.

Plaintiffs repeat and re-allege the allegations of paragraphs 1 through 36 above as

though set forth fully and at length herein.

rol

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38.

At the time he was tasked with supervising the sales of the Paris Apartment and

Paris Office and distributing the Sales Proceeds and at all relevant times, Defendant was a
director of MIP France and controlled its administration and day-to-day operations.
39.

As a director of MIP France, Defendant owed a fiduciary duty to beneficial

owners MIP USA, MIP UK, and their beneficial owner, Mr. Ivory, to act at all times with the
utmost care, honesty, undivided loyalty and fidelity in all his business dealings with regard to
MIP and MIP France.
40.

Defendant breached his fiduciary duty to Plaintiffs by the wanton and wrongful

acts of Defendant described herein, including but not limited to the acts of self-dealing that were
designed to deprive MIP USA and Ivory of their rights to the Sales Proceeds.
41.

The Defendant breached his fiduciary duty to Plaintiffs via the Misappropriations.

42.

As a proximate result of Defendant's breach of fiduciary duty via the

Misappropriations, MIP USA and Ivory have been damaged as alleged herein in an amount to be
proved at trial, but which is believed to be at least $260,889.89.
43.

Plaintiffs submitted repeated requests to Defendant for a full accounting of the

Sales and an explanation regarding the Misappropriations.

44.

Defendant has failed and refused to provide any such accounting.

45.

Based on the foregoing, Defendant's Misappropriations demonstrate that

Defendant breached his fiduciary duty of loyalty and utmost care owed to MIP USA and Ivory;
to Plaintiffs' severe financial detriment.
46.

Accordingly, Plaintiffs are entitled to a judgment against Defendant in an amount

to be proven at trial, but believed to be equal to at least $260,889.89, plus pre- and post-judgment
interests, costs and reasonable attorneys' fees.

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AS AND FOR A SECOND CAUSE OF ACTION

(Against Defendant for an Accounting)
47.

Plaintiffs repeat and re-allege the allegations of paragraphs 1 through 46 above as

though set forth fully and at length herein.

48.

There exists a fiduciary relationship and relationship of trust with respect to

Defendant's conduct in connection with the Sales and the Misappropriations.

49.

Defendant's conduct and his breach of fiduciary duty entitles Plaintiffs to an

equitable accounting by Defendant for all money or other properties received, directly or
indirectly, by Defendant or MIP France (or any entity they respectively own or control) in
connection with the Sales and the Misappropriations.
50.

Plaintiffs have repeatedly demanded an accounting with respect to the Sales

Proceeds and an explanation as to the Misappropriations from Defendant but Defendant has
failed and refused, and continues to fail and refuse, to render such an accounting.
51.

Accordingly, Defendant should be ordered and directed to provide an equitable

accounting of how the proceeds from the Sales were utilized and to deliver copies of all records,
in whatever form, including but not limited to, all electronically-stored financial or banking
information, so that Plaintiffs can verify where the Sales proceeds have been paid.
AS AND FOR A THIRD CAUSE OF ACTION
(Against Defendant for Misappropriation of Corporate Assets)
52.

Plaintiffs repeat and re-allege the allegations of paragraphs 1 through 51 above as

though set forth fully and at length herein.

53.

The Statements revealed that the Defendant's Misappropriations equal at least

$260,889.89; upon information and belief such Misappropriations were made for his own
personal use and entirely without authorization.

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54.

Upon information and belief, the Misappropriations were made by Defendant, not

for any legitimate business purpose, but instead for Defendant's personal benefit and to the
detriment of MIP USA and Ivory.
55.

The Misappropriations were a wrongful exercise of dominion and control over

funds belonging to MIP France and its owners.

56.

All of Defendant's Misappropriations occurred without the knowledge or consent

of MIP USA, MIP France or Ivory.

57.

The aforementioned acts of Defendant were willful, wanton, malicious and

oppressive, were undertaken with the intent to defraud, and justify the awarding of exemplary
and punitive damages.
58.

Accordingly, plaintiffs are entitled to a judgment against Defendant in an amount

equal to at least $260,889.89, but which may be substantially greater, depending on what the
documents produced by Defendant in this litigation reveal.
AS AND FOR A FOURTH CAUSE OF ACTION
(Against Defendant for Negligence in Management
Pursuant to French Law)
59.

Plaintiffs repeat and re-allege the allegations of paragraphs 1 through 58 above as

though set forth fully and at length herein.

60.

In the alternative to the First through Third Causes of Action alleged herein,

Defendant has negligently managed MIP France pursuant to French law, entitling Plaintiffs to
damages.
61.

The Misappropriations demonstrate Defendant's blatant dereliction of his duty as

a director of MIP France.

62.

These actions evidence Defendant's severe errors in management of MIP France.

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63.

The total damages resulting from Defendant's management errors is equal to at

least $260,889.89, but which may be substantially greater, depending on what the documents
produced by Defendant in this litigation reveal.
64.

Accordingly, Plaintiffs are entitled to judgment against Defendant and damages in

an amount equal to at least $260,889.89.

WHEREFORE, Plaintiffs Merchant Ivory Productions (USA), Inc. and James Ivory
respectfully request judgment as follows:
a.

on Plaintiffs' first cause of action for damages due to Defendant's breach of

fiduciary duty, judgment in favor of Plaintiffs and against Defendant in an amount equal to at
least $260,889.89.;
b.

on Plaintiffs' second cause of action for an order instructing Defendant to provide

a complete and immediate accounting of the Sales Proceeds to the Plaintiffs, judgment in favor
of Plaintiffs and against Defendant;
C.

on Plaintiffs' third cause of action for damages due to Defendant's

misappropriation of corporate funds, judgment in favor of Plaintiffs and against Defendant, in an

amount equal to at least $260,889.89;
d.

on Plaintiffs' fourth cause of action for damages as a result of Defendant's

negligent management pursuant to French law, judgment in favor of Plaintiffs and against
Defendant, in an amount equal to at least $260,889.89;
e.

prejudgment interest at the highest legal rate;

f.

an award of exemplary and punitive damages in favor of Plaintiffs and against

Defendant as a result of Defendant's wanton misconduct in an amount not less than

$1,000,000.00; and

10

Case 4:14-cv-00240-WTM-GRS Document 1 Filed 11/06/14 Page 11 of 14

g.

such other and further relief as the Court deems just, proper and equitable under

the circumstances.
Respectfully submitted this 6th day of November, 2014.

SHAWN 1ACHI
Georgia Bar No. 405
DAVID M. BURKO
Georgia Bar No. 179902
Attorneys for Plaintiffs
Hunter, Maclean, Exley & Dunn, P.C.
P.O. Box 9848
200 East Saint Julian Street
Savannah, Georgia 31412-0048
Telephone:
(912) 236-0261
Fax:
(912) 236-4936
E-Mail:
skachmar@huntermaclean.com
E-Mail:
dburkoff@huntermaclean.com
STEPHEN NAKAMURA
New York Bar No. 3994159
Attorney for Plaintiffs
Merle, Brown & Nakamura, P.C.
90 Broad Street, Suite 2201
New York, New York 10004
Telephone:
(212) 471-2990
Fax:
(212) 471-2997
E-Mail:
s.nakamura@mbnpc.com
Pro Hac Vice To Be Filed

11

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Exhibit A

Case 4:14-cv-00240-WTM-GRS Document 1 Filed 11/06/14 Page 13 of 14

Merle, Brown &? Nakamura, P.C.

Attorneys at Law
90 Broad Street, Suite 2201
New York, New York 0004-2271
PIERREF.V. MERLE
GEORGE R. BROWN V
STEPHEN H. NAKAMURA

THOMAS J. GERRITY
ANDREW R. PECK*

Telephone: (212) 471-2990

Telefax: (212) 471-2997

THEODORE P. NIKOLIS
OF COUNSEL

'Admitted in New Jersey oily

VIA REGULAR MAIL

(Followed by e-mail as *.pdf attachment)
October 15, 2013
John Gilbert Donaldson, Jr.
108 Schooner Drive
Savannah, Georgia 31410
John Gilbert Donaldson, Jr.
30, Rue Condorcet
75009 Paris, France
Re: Merchant Ivory Productions SarL
Dear Mr. Donaldson:
As you know, we are the attorneys for James Ivory and U.S. counsel for Merchant Ivory
Productions SarL ("MIP France"), which is owned by Merchant Ivory Productions Limited and
Merchant Ivory Productions (USA), Inc., for which we also act as counsel. Please be advised
that this letter is written without prejudice and without waiving any and all of our clients' rights,
claims, remedies and/or defenses, all of which are expressly reserved.
For several years, we have requested on behalf of Mr. Ivory and the Merchant Ivory entities a
thorough and complete accounting of the proceeds in connection with the sale of MEP France's
Paris office and Paris apartment. You have never provided us with this information, despite our
numerous and repeated requests. We have simply asked you, on numerous occasions, that you
provide us with bank account statements for MIP France's HSBC account, and a detailed
explanation supported by documentary evidence, of how the funds from the sale of the Paris
apartment and Paris office were distributed.
Inexplicably, you have never responded to our requests. In fact, we have been forced to retain an
outside attorney to obtain the MIP France bank account statements for us.

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In reviewing the account statements that counsel has delivered to us, we have identified the
following as problematic. First, there are three wire transfers to the Savannah Bank, totaling
$44,094.62. Second, from May 2009 to June 2011, there were sixty (60) cash withdrawals made,
totaling $60,300. Notably, all of these cash withdrawals were made at two HSBC branch
locations, Rue Condorcet and Rue Madeleine, which upon our information and belief are located
near your apartment. Moreover, it is our understanding that you are the only person with the
ability to make cash withdrawals from Merchant Ivory's bank account.
Finally, we have learned of sixty-seven (67) checks that were written from Merchant Ivory
France's HSBC account. Although we do not yet know what these cancelled checks will
demonstrate, after we spend nearly two thousand dollars to obtain copies of these checks, it is
unfortunately likely that they will reveal that further payments were made that will require much
further explanation.
Unfortunately, due to your silence, we are left with very few conclusions to draw. To this end,
we are providing you with one last, clear chance to provide us with the full accounting we have
previously requested. We respectfully demand that you deliver any and all Merchant Ivory and
MIP France records in your custody, possession and control to this office by not later than
Tuesday, October 22, 2013.
In the event that you fail to do so, we will be left with no choice but to conclude that you
mismanaged and (truly, hopefully not the case) misappropriated MIP France assets to the severe
financial detriment of Merchant Ivory and MIP France. If you fail to comply with this demand,
we will be forced to commence appropriate legal action. Again, please note that the foregoing is
written without prejudice to any of our client's rights, remedies, claims and/or defenses.
Very truly yours,

Stephen Nakamura