Two Advisors Must Pay $7.2M For Bad Janis Joplin Movie Deal

A Massachusetts U.S. district court judge ordered Legacy Point Capital LLC, and its advisors Byron Holley and John Loudon to pay over $7.2 million in damages for defrauding Chesterton Capital into financing a Janis Joplin biopic, according to a judgment.

U.S. District Judge Leo Sorokin ruled in favor of Chesterton Capital and ruled that Legacy Capital violated a Massachusetts consumer protection law that requires offenders to pay up to triple the amount of damages. Chesterton Capital was entitled to $2.4 million in damages.

Holley and Loudon are members and owners of Legacy Point Capital, an investment banking and advisory firm.

In 2012, film producers Ron Terry (known for the TV movie Hendrix) and Robert Katz sought the assistance of Legacy Point to fund the production of a Janis Joplin biopic titled “Get It While You Can,” according to a court document.

The LA Times reported in 2014 that Terry had been trying to develop a Joplin biopic for 15 years and was able secure actress Amy Adams to star as Joplin.

Legacy Point Capital agreed to raise $10 million in equity towards the $20 million film budget and then reached out to Anne Brensley of Boston Financial Trust Advisors to bring in investors.

However, neither Legacy Point Capital nor Brensley were able to find investors to finance the $10 million. Brensley was able to locate John Walsh of Chesterton Capital to seed the production a $1.2 million bridge loan for pre-production costs.

The producers were unable to put up collateral for the loan, but Loudon and Holley agreed to personally guaranty the loan. According to a court document, Holley sent Walsh a deceiving financial statement showing a Wells Fargo bank account holding $2.9 million to successfully persuade Walsh into an agreement.

During court proceedings, it was discovered that, at the time, Holley really had a little over $5,000 in a checking account and around $100 in an IRA.

By 2014, Legacy Point Capital still had not secured $10 million in equity. Legacy Capital defaulted on the bridge loan twice before Chesterton sued the producers and then Legacy Capital.