Private Claims New Frontier Media Breached Contract in $1M Suit

Sep 5, 2012 12:00 PM PST

LOS ANGELES — Private Media Group is seeking $1 million in compensatory damages against New Frontier Media over a licensing deal that went sour.

The breach-of-contract suit, filed at Los Angeles Superior Court in late July, has its roots in a 2007 licensing deal where Private would supply films from its library to the transactional TV network.

But a little more than a year into the deal, according to the suit, New Frontier Media failed to pay a quarterly installment. The Boulder, Colo.-based company responded to communication from Private, saying it was paying vendors "in order of operations priority."

Several months later, according to the suit, New Frontier Media execs said that it was unable to derive usable content from Private's library, a move Private said was made as a "false pretext" invented to terminate the licensing deal.

"Defendants provided no substantive information about the basis of their supposed newfound concerns or offered any suggestions as to how [Private] could meet defendants' needs," Private counsel said. "Defendants even refused to meet ... to discuss the matter."

Later, New Frontier Media sent Private communication that announced its intention terminate its deal, claiming it is entitled to deduct all of its expenses from Private's share of net revenue generated  under the licensing deal.

Private's breach-of-contract suit, through its Fraserside Holdings unit, asks for $1 million in damages and an accounting of New Frontier Media's proceeds relative to its films, as well as attorneys fees

Private CEO Charles Prast declined comment to XBIZ on the suit; New Frontier Media CFO Grant Williams did not respond to XBIZ queries over the suit.

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