I’ve never been a particularly good listener when it comes to authority figures, so when reclusive NMR owner Danny Zappin temporarily poked his head out of his likely Walden Pond cabin (okay, except the cabin is a hipster bachelor pad, and Walden Pond is Venice Beach) to comment on a recent NMR article, the decisively titled “Done Deal: Disney Buys Maker Studios For $500 Million,” I thought, hmm, what’s new on my DVR? Of course, with my luck, what he said ended up being presciently true:
Alright, so I should’ve turned off the latest installment of “The Adventures of Olivia Pope, Presidential Side Bae” and listened. Turns out The Happiest MCN on Earth it isn’t quite yet — Danny Zappin, cofounder and ex-CEO of Maker Studios, has delayed the deal by filing a temporary restraining order based on his current lawsuit against his former company. In Zappin’s injunction request, his legal team claims: “Permitting the April 15, 2014 vote on the Merger to proceed without requiring additional disclosures would irreparably harm Plaintiffs, as well as Maker shareholders, because it would deprive them of the opportunity to make an informed vote on the Merger.” Translation: Zappin and his legal team want the current lawsuit fully disclosed (because not all of its details are public) — or ideally, settled — before Maker shareholders can approve of Disney’s acquisition of the MCN.
Back in June of last year, Zappin, along with founding executives Scott Katz, Derek Jones and Will Watkin, filed suit against Maker after his ouster alleging that the company concealed important information, breached fiduciary duty and embezzled assets, giving the MCN an unfair advantage over Zappin and his position in the company. In the suit, Zappin alleges that Maker diluted common stock in order to gain more board seats to topple Zappin as their then-CEO and to replace him with current executive chairman Ynon Kreiz.
So why does Zappin’s camp want their current lawsuit fully disclosed before the merger vote goes through next week? If his suit is a winner, the common stock that all Maker shareholders own could get an uplift of 15-20 percent in value, a sizable increase considering the proposed deal has Disney purchasing Maker for $500 million in cash. Of course, Zappin also stands to gain monetarily since he’s still a major stakeholder. Zappin’s legal team, however, has avoided the posture that it’s all about Zappin’s money, but rather that it’s about Zappin standing up for all the shareholders who stand to lose money because of what Zappin and the suit’s plaintiffs allege is the illegal hoarding of millions of shares by some of Maker’s partners and investors, which include suit defendants Ben and Lisa Donovan, Ynon Kreiz, Mark Suster, Dana Settle, Rachel Lam, Michael DiSanto and GRP Partners.
A single footnote in Zappin’s 26-page injunction request is especially succinct in explaining the nature of his complaint:
The California judge assigned to Zappin’s ex parte will give his decision on Monday, April 14 on whether Zappin’s request for the restraining order will be granted.
We’ve reached out to Disney and Maker for comment and will update as the story develops.