Settlement Reached in Ninn Worx_SR Legal Battle

Dec 20, 2010 6:30 PM PST
SANTA BARBARA, Calif. — The legal battle pitting director Michael Ninn against Spearmint Rhino CEO John Gray and Ninn Worx_SR apparently has been settled.

Ninn, through his publicist on Monday, wouldn't comment on terms of the compromise to XBIZ, but a proposed settlement has been in the works since early October.

The trustee assigned to Ninn, whose Chapter 7 filing continues to wend through bankruptcy court, disclosed that Ninn will transfer equity of Ninn Worx_SR in return for various creative material once created by Ninn.

Specific details of the settlement weren't immediately available, but presumably the "creative material" includes the Ninn Worx_SR-backed movie "The Four."

Ninn Worx_SR was formed three years ago after Gray approached Ninn, who has directed more than 60 adult films in 18 years, with an offer to market and distribute Ninn’s films and finance production of future films, allegedly promising to grow the company from a $2 million studio to one that would see in excess of $20 million in sales.

Ninn sold his interest in Ninn Worx for $1,000 and a 49-percent share of the new company. In addition, Ninn Worx_SR paid off Ninn Worx accounts payable of about $221,000.

But a year later and shortly after a Ninn-directed movie called "The Four" wrapped, Ninn found himself locked out of his office, fired as Ninn Worx_SR CEO and unable to get Ninn Worx_SR to compensate him.

Gray and Ninn Worx_SR later filed a suit at Los Angeles Superior Court alleging that Ninn had breached his fiduciary duty by exceeding a budget relative to “The Four” and by not delivering a completed film.

Ninn later sued and countersued, alleging fraud, misrepresentation, rescission of an agreement and breach of fiduciary duty.

Ninn also was sued by Ninn Worx_SR over the use of his stage name and related Internet properties. In that suit, Ninn Worx_SR claimed Ninn began competing against the company, advertising the “Michael Ninn” mark and variations for competing products.

Gray declined to comment on the settlement to XBIZ on Tuesday.

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