Contract analysis

I. INTRODUCTION Plaintiff Marguerite D. Fonseca respectfully submits this Mediation Brief in advance of the mediation session scheduled for May 19, 2023, before the Honorable Patricia Villareal (Ret.), through Apex Mediation Services. Ms. Fonseca is represented in this matter by Calderwood & Harkness LLP, with Samuel Eklund serving as Responsible Partner and Jeffrey Park serving as Lead Associate. The purpose of this

II. BACKGROUND A. Formation of Coastal Meridian Productions LLP Coastal Meridian Productions LLP was formed on March 8, 2017, as a California limited liability partnership pursuant to the California Revised Uniform Partnership Act (Cal. Corp. Code §§ 16100, et seq.). A Statement of Partnership Authority was filed with the California Secretary of State on that date, and CMP has been in continuous good standing since i

III. THE DISPUTE The dispute between the parties centers on two categories of financial irregularities perpetrated by Mr. Rennick during his tenure as Managing Partner: (1) the payment of excessive management fees to RSV in violation of the contractual cap in Section 6.2 of the Partnership Agreement; and (2) the improper reclassification of distributable revenue as advance recoupments, which reduced the distributable

IV. STRENGTH OF FONSECA'S CLAIMS Ms. Fonseca's Complaint asserts five causes of action against Mr. Rennick and RSV. Each is well-supported by the factual record and applicable California law. The following discussion summarizes the legal basis for each claim and explains why Ms. Fonseca is likely to prevail if the matter proceeds to trial. A. Breach of Fiduciary Duty As a partner in CMP, Mr. Rennick owed fiduciary du

Section 6.2 of the Partnership Agreement is unambiguous: management fees payable to the Managing Partner's designee are capped at five percent (5%) of gross receipts per film property. Mr. Rennick caused CMP to pay RSV $2,694,500 — more than $1.5 million in excess of the permissible cap. This constitutes a clear and material breach of the Partnership Agreement. Mr. Rennick is anticipated to assert, in defense, that a

V. LITIGATION STATUS The following summary of the procedural status of this case is provided for the mediator's reference. Ms. Fonseca filed her Complaint on January 24, 2023, in the Superior Court of California, County of Los Angeles, and the matter was assigned Case No. 23STCV01897. The Complaint asserts five causes of action: (1) breach of fiduciary duty; (2) breach of the Partnership Agreement; (3) accounting; (4

VI. SETTLEMENT POSITION Ms. Fonseca is prepared to settle this matter on the terms set forth below. These terms are designed to be fair to both parties, to compensate Ms. Fonseca for the documented financial irregularities, and to establish a prospective governance framework that will restore trust and transparency to the partnership while preserving CMP as a going concern. A. Monetary Recovery Ms. Fonseca requests a

1. Reduction of Management-Fee Cap. The management-fee cap in Section 6.2 of the Partnership Agreement shall be reduced from five percent (5%) to three percent (3%) of gross receipts for all current and future CMP-produced film properties. This reduction reflects the fact that Mr. Rennick, through RSV, has demonstrated a willingness to exploit the fee mechanism to the detriment of Ms. Fonseca, and a lower cap is nece

2. Restoration of Reclassified Revenues. The $847,200 in domestic distribution revenues that were improperly reclassified as advance recoupments shall be restored to the distributable profit pool, retroactive to the quarters in which they were originally received (Q3 2020 for the $538,200 in Salt Wind home-entertainment revenue and Q1 2021 for the $309,000 in Iron Lullaby SVOD revenue). The waterfall for each of thes

3. Reclassification Consent Requirement. Going forward, any reclassification of revenue from "distributable revenue" to any other category on the partnership's waterfall schedules — including, without limitation, reclassification to advance recoupments, reserves, or any other non-distributable category — shall require the prior written consent of both partners before such reclassification is reflected in the waterfal

4. Independent Accountant Administration. All waterfall calculations shall be administered on a quarterly basis by an independent accountant mutually selected by the partners. Clearfield & Moss CPAs shall continue to serve as the partnership's accountant, but Clearfield & Moss's waterfall calculations shall be subject to oversight and review by Tillerman Forensic Advisory LLC for the first two annual audit cycles fol

VII. WHY RENNICK SHOULD SETTLE The mediator is respectfully invited to consider the following factors, each of which weighs heavily in favor of a negotiated resolution on the terms proposed by Ms. Fonseca: The forensic evidence is strong and well-documented. Tillerman Forensic Advisory's analysis is based on CMP's own financial records, bank statements, and RSV invoices. The excess-fee calculation is a straightforwar

VIII. CONCLUSION Ms. Fonseca respectfully requests that the mediator consider the strength of her claims, the clarity and reliability of the forensic evidence, and the substantial benefits to both parties of a negotiated resolution that preserves the Coastal Meridian Productions LLP partnership as a viable, revenue-generating enterprise. The financial irregularities documented in this brief are not matters of interpr