Contract analysis

I. EXECUTIVE SUMMARY This memorandum provides our assessment of the claims and defenses arising from Marisol Fonseca's dispute with her business partner, Desmond R. Rennick, in connection with the operation of Coastal Meridian Productions LLP ("CMP"), EIN 83-2197644, a California limited liability partnership formed to develop, produce, and exploit feature-length motion pictures. Based on our review of the available

II. BACKGROUND A. The Partnership Coastal Meridian Productions LLP was formed on March 8, 2017, pursuant to the California Revised Uniform Partnership Act (Cal. Corp. Code §§ 16100–16962) as a California limited liability partnership. The partnership's registered agent is Pacific Coast Registered Agents, Inc., located at 4200 Wilshire Blvd., Suite 610, Los Angeles, CA 90010. CMP's principal office is located at 1140

III. LIABILITY ANALYSIS A. Excess Management Fees (Claim 1 — Breach of Partnership Agreement / Breach of Fiduciary Duty) The most straightforward and strongest of Ms. Fonseca's claims arises from the excess management fees paid by CMP to RSV in violation of the five-percent cap established by Section 6.2 of the Partnership Agreement. The Contractual Cap. Section 6.2 provides, in relevant part, that management fees pa

1. Post-Production Supervision Invoices ($814,600 — 37 invoices). RSV billed CMP $814,600 for "post-production supervision" on various film properties during periods when CMP had already separately engaged third-party post-production houses to perform substantially the same work. Tillerman has identified the third-party engagement agreements and corresponding invoices, which suggest that the RSV charges were duplicat

2. Festival and Distribution Services Invoices ($412,900 — 18 invoices). RSV billed CMP $412,900 for "festival and distribution services" on films that had already completed their theatrical release windows. Tillerman has found no corresponding deliverables, travel records, festival attendance records, or distribution-related work product in CMP's files to support these charges. Several of the invoices reference fest

3. Miscellaneous Charges Above Market Rate ($306,000). The remaining excess of approximately $306,000 is spread across various invoices for production management and related services. Tillerman's preliminary benchmarking analysis indicates that the rates charged by RSV exceeded comparable industry rates by approximately forty to sixty-five percent, even before accounting for the five-percent contractual cap. Assessme

IV. DAMAGES CALCULATION A. Core Damages (Fonseca's 55% Share) The following table summarizes the core damages attributable to Ms. Fonseca based on her fifty-five percent equity interest in CMP: The total core damages of $1,309,385 represent the amount by which Ms. Fonseca's partnership distributions were reduced as a direct result of Mr. Rennick's breaches. This figure will be further refined upon receipt of Tillerma

Section 12.3 of the Partnership Agreement provides for fee-shifting in the event of a material breach. If Ms. Fonseca prevails on her breach-of-partnership-agreement claim — which we assess at an eighty percent probability — she should be entitled to recover her reasonable attorney's fees and costs incurred in prosecuting this action. This would include the fees incurred at Calderwood & Harkness as well as, potential

V. RECOMMENDED LITIGATION STRATEGY A. Pre-Litigation Phase (Current) We are currently in the pre-litigation phase of this matter. The principal activities in this phase include:

1. Awaiting Tillerman's Forensic Memorandum. The full forensic memorandum from Tillerman Forensic Advisory, including the reconstructed waterfall analysis, is expected on or about December 19, 2022. This document will provide the detailed evidentiary foundation for Ms. Fonseca's claims and will inform the final damages calculations reflected in the Complaint.

2. Continuing Document Review. We continue to review and analyze the 142 RSV invoices and the CMP quarterly financial statements produced to date. We have also requested, through informal channels, additional documents from Mr. Rennick's counsel, including RSV bank records and communications between Mr. Rennick and Clearfield & Moss. To date, no additional production has been received.

3. Monitoring for Settlement Overtures. We remain attentive to any meaningful settlement overture from Mr. Rennick or his counsel. The thirty-day compliance deadline in our October 10, 2022 demand letter has expired without compliance (the deadline expired on or about November 9, 2022). Mr. Rennick's failure to comply with the demand supports Ms. Fonseca's entitlement to pre-judgment interest from the date of demand

1. Breach of Fiduciary Duty — against Desmond R. Rennick, individually and as Managing Partner of CMP.

2. Breach of Partnership Agreement — against Desmond R. Rennick, individually and as Managing Partner of CMP.

3. Accounting — against Desmond R. Rennick and CMP.

4. Constructive Fraud — against Desmond R. Rennick, individually and as Managing Partner of CMP.

5. Unjust Enrichment — against Rennick Slate Ventures LLC. We recommend including a demand for a jury trial. While the accounting claim is equitable in nature and would be resolved by the court, the breach-of-fiduciary-duty, breach-of-contract, and constructive-fraud claims are amenable to jury determination. The inclusion of a jury demand increases litigation costs and complexity for both parties, which may serve as

1. RSV Bank Records. We will seek expedited discovery of RSV's bank records to confirm the receipt and disposition of the excess management fees. These records will establish the flow of funds from CMP to RSV and, potentially, from RSV to Mr. Rennick personally. If the funds were distributed to Mr. Rennick or used for personal expenses, this evidence will strengthen the fiduciary-duty and unjust-enrichment claims.

2. Clearfield & Moss Records and Deposition of Howard Moss, CPA. We will subpoena the complete records of Clearfield & Moss CPAs related to CMP, including all workpapers, communications with Mr. Rennick, and internal memoranda regarding the revenue reclassifications. We will also depose Mr. Moss to establish whether the reclassifications were directed or influenced by Mr. Rennick and whether Mr. Moss's firm maintaine

3. Written discovery to Rennick. We will serve interrogatories and requests for production on Mr. Rennick targeting all communications with RSV and Clearfield & Moss regarding fee invoicing, waterfall calculations, revenue classifications, and distribution timing. We will also request all documents reflecting Mr. Rennick's authority to approve RSV invoices and any communications with Ms. Fonseca regarding management

4. Distribution Agreements. We will request all domestic distribution agreements for Salt Wind and Iron Lullaby, including any amendments, side letters, or supplemental agreements. These agreements will allow us to independently verify the revenue streams that were the subject of the reclassifications and to confirm the timing and amount of the Tranche B advance recoupment. D. Early Mediation We recommend proposing e

VI. LITIGATION BUDGET ESTIMATE A. Phase-by-Phase Budget The following table sets forth our estimated fees for each phase of the litigation, from the current pre-litigation phase through a potential trial: These estimates are based on current hourly rates for the attorneys and staff assigned to this matter and assume a level of complexity and document volume consistent with our current understanding of the case. The e

VII. NEXT STEPS Based on our assessment of the claims, defenses, damages, and strategic considerations outlined above, we recommend the following immediate next steps:

1. Receive and Analyze Tillerman's Full Forensic Accounting Memorandum. The full memorandum, including the reconstructed waterfall analysis (expected as Exhibit C), is due on or about December 19, 2022. Upon receipt, we will review the memorandum in detail, confirm the damages calculations, and assess whether the analysis identifies any additional irregularities or modifies our current damages estimate.

2. Schedule Client Conference. We recommend scheduling a client conference with Ms. Fonseca as soon as practicable after receipt of the Tillerman memorandum — ideally during the last week of December 2022 or the first week of January 2023 — to discuss the litigation budget, settlement posture, walk-away threshold, and filing strategy. Ms. Fonseca's input on these matters is essential to the formulation of a coherent

3. Finalize and File Complaint. If no meaningful settlement progress is achieved by early January 2023, we will finalize the Complaint and file it in the Superior Court of California, County of Los Angeles. The Complaint will assert the five causes of action described in Section V.B above and will include a demand for jury trial.

4. Document Rennick's Non-Compliance with Demand. The thirty-day compliance deadline set forth in our October 10, 2022 demand letter expired on or about November 9, 2022, without compliance. We should document Mr. Rennick's non-compliance in our file and reference it in the Complaint for purposes of establishing the accrual date for pre-judgment interest and demonstrating Mr. Rennick's unwillingness to account volunt

5. Prepare discovery Plan and Identify Deponents. We should begin preparing detailed discovery requests and identifying potential deponents in advance of filing, so that discovery can be served promptly after the answer is filed. Key deponents include Howard Moss of Clearfield & Moss CPAs (regarding the revenue reclassifications and his relationship with Mr. Rennick) and Mr. Rennick himself, both in his individual ca

VIII. CONCLUSION Based on our review of the available evidence and our analysis of the applicable law, Ms. Fonseca has strong claims against Mr. Rennick and RSV, supported by clear contractual provisions, well-established fiduciary-duty principles, and compelling preliminary forensic evidence. The excess-management-fee claim is particularly strong, with an estimated eighty percent (80%) probability of success, given