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Law360 Reports on Successful Representation of Spyglass by O'Melveny's PutnamNovember 16, 2011 In covering a tentative ruling in favor of Spyglass Entertainment Funding LLC in breach of contract litigation brought by First California Bank, Law360 highlighted the winning arguments by O'Melveny Business Trial and Litigation Practice Group partner Marvin Putnam on behalf of Spyglass.
Law360 reported that California Superior Court Judge Rita Miller tentatively tossed First California Bank’s primary breach of contract claim alleging Spyglass failed to reimburse the bank for increased costs associated with a $275 million loan used to finance the studio's Hollywood blockbusters. She was persuaded by Putnam's argument on behalf of Spyglass that the bank has suffered no actual losses and is using the claims in an attempt to sidestep its contractural obligations to finance future films, according to the online legal newsletter.
As reported by Law360, The judge agreed with Putnam that the loan agreement does not require the studio to reimburse the bank for accounting costs after it was forced to write down almost US$3.5 million because of the depreciating value of Spyglass' film library.
According to the online legal newsleter, "if the [tentative] ruling stands, it would leave the bank with one remaining claim against Spyglass--that the movie studio breached the covenant of good faith and fair dealing by directing optional prepayments of principal to two additional lenders."
Putnam leads the O'Melveny defense team that includes counsel Kathryn Cahan, also of the Firm's Century City office.