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ADV Countersues FUNimation

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  • [R1 DVD] ADV Countersues FUNimation

    Widgets Magazine
    via CR news: | ANN's report
    ADV Countersues FUNimation, Claims They are an Illegal Monopoly

    Counterclaim filed May 8th, 2012

    The opinions and "facts" expressed in this article are those of the legal documents.

    In the ongoing lawsuit between FUNimation and ADV over ADV's dissolution and debts, ADV has decided to countersue as a third-party, claiming FUNimation is trying to monopolize the anime industry through illegal means. Filed on May 8th, 2012 in the Harris County Courts is an amended answer, original counterclaim and third-party claim by A.D. Vision against the entities collectively known by the public as "FUNimation."

    The lawsuit, specifying FUNimation Entertainment, FUNimation Productions Ltd., AnimeOnline Ltd., FUNimation GP LLC, Anime LP Holdings LLC., FUNimation LP LLC, and FUNimation CEO Gen Fukunaga as the defendants, seeks judgment in favor of ADV in both the lawsuit and the countersuit; awarding ADV its "actual, consequential, direct, indirect, and exemplary damages"; attorney's fees, interests and court costs; and "an order enjoining FUNimation from attempting to enforce any rights it claims to have secured from ARM and from obtaining any assets owned by the defendants" of the original suit.

    ADV's countersuit claims nine reasons for the suit: The first two reasons are for violation of the Federal Sherman Act and the Texas Free Enterprise Act, claiming that FUNimation is, or almost is and is seeking to be, a monopoly, and that they have "engaged in anticompetitive or predatory conduct" to "maintain willfully, or to gain" their monopoly. ADV also contends that the "conduct was willful or flagrant" and therefore seeks triple damages.

    ADV's next reason claims that "Unfair Competition/Misappropriation" has occurred, claiming Fukunaga and FUNimation induced ARM to share ADV's own information and strategies regarding the anime industry and business with FUNimation. This information was contractually considered confidential between ADV and ARM. They also claim FUNimation used this information "to compete and gain a free-ride" without the expenses ADV had.

    ADV's fourth reason claims that "Tortuous Interference with Existing Contract" has occurred as FUNimation "willfully and intentionally interfered with the facility agreement" by inducing ARM to breach a provision which prevented giving a right or remedy to a third party without permission, disclose confidential information, and conduct a foreclosure sale which was not lawful.

    ADV's fifth and sixth claims are "Violations of Chapter 9 of the Texas Business and Commerce Code" and "Conspiracy to Violate Chapter 9 of the Texas Business and Commerce Code" claiming that ARM did not follow the law when they accepted the collateral for the debt and/or when they sold the titles to themselves. ADV claims that FUNimation is either liable if they acquired the rights they claim and/or FUNimation is independently liable since they "aided, abetted or otherwise induced" ARM's violations. ADV also claims ARM, Sojitz and JCI conspired in some manner with Fukunaga and FUNimation to violate chapter 9.

    ADV then makes a claim for "Breach of Contract," reclaiming that ARM breached the facility agreement and harmed ADV in doing so; "Conspiracy to Commit Fraud", claiming that "Fukunaga, FUNimation, Sojitz, ARM and JCI conspired, agreed and otherwise had a meeting of the minds to defraud ADV" when they "actively concealed" the sale of the titles and the assignment agreement; and lastly, "Fraud and Fraudulent Inducement," claiming that ARM falsely represented its intentions when it entered into and executed the facility agreement and ADV would have never entered into the agreement knowing this, and FUNimation is liable in place of ARM as claimed before.

    In claiming that the foreclosure sale was unlawful, ADV claims that a "sham foreclosure sale" took place. After taking possession of the materials for the ARM titles, ADV claims ARM told them on May 20th, 2008 that they planned to sell the titles at a public sale in two weeks. ADV says that ARM was the only bidder at this sale and they bought the ARM titles, including the master tapes for the dubs which ADV claims they spent 4 million dollars producing, "from itself for a fraction of the total value." What makes the sale a "sham" is that ADV contends the sale was actually a private sale "intended to, among other things, circumvent the requirements for accepting collateral in satisfaction of debt." Additionally, ADV claims that after the sale, ARM improperly calculated and claimed a deficiency, an outstanding debt of nearly 8 million dollars, which ARM then claimed was being assigned to Sojitz for a tax write-off.

    The third-party claim by ADV is part of FUNIMATION ENTERTAINMENT vs. A D VISION INC.

    Stay tuned later today for part two as we explore more into how similar and yet different two parties can see the same actions.
    Last edited by WTK; 06-11-2012, 06:28 PM.

  • #2
    Re: ADV Countersues FUNimation

    Well isn't this lovely? They're probably go to lose this, and thus surviving the lawsuit FUNimation filed will be next to impossible.

    2012 is probably the worst year so far for the companies that are still around. First Bandai goes under (Basically), Media Blasters lays off 60% of their employees, FUNimation sues ADV/Sentai, it's found that Media Blasters supposedly hasn't been a company since April 2011, and now ADV/Sentai is suing FUNimation, lovely...
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    • #3
      Re: ADV Countersues FUNimation

      Let's see. I see this one of two ways.

      1. Funimation found some damning evidence in the discovery period which has apparently concluded for the most part. ADV goes for this as a last ditch effort to stall before they get whacked up.
      2. ADV found some damning evidence or even none at all in the discovery period and has decided to go after Funimation in this manner. Strangely, this doesn't seem to me to be as far fetched as it sounds.
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      • #4
        Re: ADV Countersues FUNimation

        In Texas, it's all about who has the bigger gun. Well I can only hope this will just scare FUNimation enough that neither suit happens, but that's probably a lot more optimistic than realistic.
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        • #5
          Re: ADV Countersues FUNimation

          I'm no legal expert, especially on foreign law, but don't you pretty much have to counter-sue as it amounts to admitting guilt otherwise?

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          • #6
            Re: ADV Countersues FUNimation

            It funny how some fans have said that FUNimation was approaching monopoly levels of control during the last few years, and now we have ADV actually accusing them of becoming a monopoly.

            Glad I had a fun time at AnimeNEXT, since this would likely annoy me more than it is right now.
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            • #7
              Re: ADV Countersues FUNimation

              Wonderful. Now we have both companies going at it, although I doubt ADV can win it.
              "I'm sorry, did you say something? Because your authority is not recognized in Fort Kickass."
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              • #8
                Re: ADV Countersues FUNimation

                Something like this is just bad for an industry that's hanging by a thread. I never imagined something like this happening where ADV/Sentai and Funimation are going after each other like this (although it really is more about Sojitz). I can't see ADV winning this.
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                • #9
                  Re: ADV Countersues FUNimation

                  Welp we're doomed. No matter who wins the lawsuit, we lose if there's on less R1 licensor out there...
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                  • #10
                    Re: ADV Countersues FUNimation

                    FUNi should speed up their backlog so I can give them more money so they can afford better lawyers.
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                    • #11
                      Re: ADV Countersues FUNimation

                      If this conflict keeps up, it can only mean one thing—no more anime in the U.S!

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                      • #12
                        Re: ADV Countersues FUNimation

                        I argee that these two companies fighting with each other is only harming the anime industry as a whole. I don't think we should be predicting a winner or loser at the moment. ADV may have some kind of proof to back up this counter claim. And even if they do lose; this is just a third party claim. The official counter claim from section 23/Sentai Filmworks had its own counterclaims such as Statute of Limitations and that funi does not have the rights to sue for ARM. I believe ADV/Sentai is just trying to defend itself and stop this case from going to trial. Because if the fraud or monopoly is true that basically means Funi and the other listed companies must open their financial books.
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                        • #13
                          Re: ADV Countersues FUNimation

                          I just can't wait for the suit to be over with and we know the outcome. I hope that neither company goes under due to the result.

                          As someone who has read through a good portion of the legal documents I can say that Funimation's presentation seems more solid as a whole. ADV has quite a few valid arguments, and it will be interesting to see what is actually decided. I just think it's sort of ironic that ADV is claiming the same thing about ARM that they did themselves in the situation, supposedly.
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                          • #14
                            Re: ADV Countersues FUNimation

                            Originally posted by Mandilok View Post
                            If this conflict keeps up, it can only mean one thing—no more anime in the U.S!
                            I think "no more anime" is being way too pessimistic. There are other distributors around. A whole lot less possibly, though.

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                            • #15
                              Re: ADV Countersues FUNimation

                              Originally posted by BigOnAnime View Post
                              2012 is probably the worst year so far for the companies that are still around. First Bandai goes under (Basically), Media Blasters lays off 60% of their employees, FUNimation sues ADV/Sentai, it's found that Media Blasters supposedly hasn't been a company since April 2011, and now ADV/Sentai is suing FUNimation, lovely...
                              Look at the bright side, there's still plenty of time for the companies to find more ways to make things even worse than they currently are. Honestly, this is the downside to following any industry.

                              Sure, you get some information and such. However you also have to deal with things that end up just being all kinds of frustration. Sure some of that frustrating stuff might in fact be valid, but frustrating is still frustrating.
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