SMOKEY JOE'S CAFE and BULL DURHAM Producers Sue UBS Bank for $3.5 MIllion Loss

The companies behind two Broadway-aimed productions, a musical adaptation of the film Bull Durham and the revival of Smokey Joe's Cafe, are suing UBS Financial Services and its parent company Switzerland-based UBS AG Bank, for failure to prevent fraud which they say resulted in the theft of $3.5 million.

The companies, Player to be Named Later and Smokey Joe's Cafe Broadway Revival, filed a lawsuit yesterday in New York federal court suing UBS for "aiding and abetting fraud, aiding and abetting breach of fiduciary duty, negligence and gross negligence, negligent supervision, breach of fiduciary duty, breach of FINRA Rule 2090 and breach of FINRA Rule 2010."

The stories behind the suits begin when Player to be Named Later partnered with Weathervane Productions and Smokey Joe's Cafe Broadway Revival partnered with with Forrest Capital Partners, reaching separate, but nearly identical deals to produce both shows, UBS was the bank for both companies

Funding agreements with Weathervane and Forrest Capital dictated that a signatory from each company would be named to a master UBS account. Transactions from the account would only be authorized if all three representatives signed off on them. Weathervane and Forrest Capital were supposed to match the funds wired into the account by the producers.

The Bull Durham producers allege that the day after they wired $2.5 million for the show into the account, four outgoing payments were authorized, including $60,000 to a consulting firm, Capital Keys. The $2.5 million was spent in less than three months, with the additional $1 million for Smokey Joe's Cafe is unaccounted for. Producers believe it was stolen.

In 2019, Benjamin McConley of Forrest Capital pleaded not guilty to one count of conspiracy to commit wire fraud. Jason Van Eman of Weathervane also pleaded not guilty to an indictment for fraud in 2019.

Producers contend that UBS failed to prevent the loss of capital, having "learned of the serial frauds alleged" or "failed to learn of them due to shoddy due diligence" and for keeping the accounts open despite indications of money laundering.

"Under no circumstances were the funds that had been wired to be used or diverted for any purpose other than to fund the production of the plays," writes the producers' attorney Kevin Galbraith. "Rather than safeguard the funds, consistent with the Funding Agreement and the brokerage account agreements, Weathervane and Forrest Capital began looting the funds almost immediately."

Gallbraith also went into detail into what he describes as history of "fraudulent, deceptive and unethical conduct" on the part of UBS including being found guilty of money laundering in Singapore in 2016 and billions of dollars in criminal fines and penalties in a number of countries, including France, Japan, and the US.

"[T]he UBS Defendants have a long and plainly demonstrable history of either affirmative unlawful conduct of their own, or grossly negligent conduct in permitting others to utilize their financial services platforms to defraud others...[D]espite billions in criminal fines, civil penalties and disgorgement orders, they do not appear to have drawn any meaningful lesson from their prior failures, and are recidivists." writes Gallbraith.

The producers are seeking repayment of the $3.5 million including interest and costs and punitive damages.

Read more at The Hollywood Reporter.

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