Ekwan E. Rhow - State Bar No.

I74604
birdmarella.com
- State Bar No. 279586
2
.com
Jun - State Bar No. 271461
cla
3 P
irdmarella.com
V/OLPERT, NESSIM,
4
RHOW, P.C.
KS, LIN
Floor
East,
23rd
Park
1875
Century
5
Los Angeles, California 90061 -2561
6 Telephone: (3 l0) 201-2100
Facslmile: (3 10) 201-2110

1
B

Attorneys for Koloni Reklam, Sanayi, Ticaret

LTD/STI

SUPERIOR COURT OF THE STATE OF'CALIFORNIA

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FOR THE COUNTY OF LOS ANGELES, CENTRAL DISTRICT

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t2
13

KOLONI REKLAM, SANAYI, TICARET

LTD/STI,

Plaintifl

I4

i5

VS

l6 VIACOM, INC.; and DOES I-20,

Defendant.

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CASE NO.

PLAINTIFF KOLONI REKLAM,

SANAYI, TICARET LTDISTI'S
COMPLAINT AGAINST DEFEI.'{DANT
vrAcoM, rNC. FoR:
(1) BREACTT OF CONTRACT RE
OPERATING AGREEMENT AND

AMENDMENTS;
(2) BREACH OF FIDUCIARY DUTY;
(3) BREACH OF TMPLTED
COVENANT OF GOOD FAITH AND
FAIR DEALING;
(4) UNJUST ENRICHMENT;
(s) JUDTCTAL DTSSOLUTTON;
(6) EQUITABLE RELIEF FOR LLC
MEMBER OPPRESSION

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DEMAND FOR JURY TRIAL

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31 55 128.6

COMPLAINT

Plaintiff Koloni Reklam, Sanayi, Ticaret LTD/STI ("Piaintiff'), by and through its

undersigned counsel, alleges and complains against Defendants Viacom, Inc. ("Viacom")

and Does 1 through 20, inclusive (collectively, "Defendants") as follows:

SUMMARY OF CASE

1.

Viacom, Inc. ("Viacom") is an American global mass media company with

interests primarily in, but not limited to, cinema and cable television. It is the world's sixth

largest broadcasting and cable company in terms of revenue (behind Comcast, The Walt

Disney Company, Twenty-First Century Fox, Inc., Time Warner, and CBS Corporation,

respectively). Voting control of Viacom is held by National Amusements, Inc., a privately

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owned theater company controlled in turn by billionaire Sumner Redstone. Including

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Spike, MTV, Comedy Central, Viacom Media Networks, and Paramount Picfures, Viacom

t2 operates approximately 170 networks reaching approximately 700 million subscribers in

i3 160 countries.

2.

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To amass this series of holdings, Viacom has repeatedly purchased majority

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interests in privateiy-held companies and followed the same modus operandi: withhold

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financiais from minorify shareholders while using its sheer mass and complicated weave of

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accounting relationships to hide or divert income at the expense of these shareholders, who

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are lefi" in the dark.

3.

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("Bellator"), the prominent mixed martial artists promotion company and one of its

2l founding

investors,

plaintiff Koloni Reklam,

Sanayi, Ticaret LTD/STI ("Piaintiff').

THE PARTIES

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4.

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This is precisely what happened with Bellator Sport Worldwide LLC

Plaintiff is a company based in Turkey. Plaintiff is a minority member of

Bellator.

5.

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On information and belief, defendant Viacom is a corporation organized

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under the laws of the State of Delaware, with its principal place of business in New York

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City and with an office in Los Angeles, California'

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315s 128.6

COMPLAiNT

6.

Does

through 20, inclusive, are sued herein pursuant to Code of Civil

Procedure 414, and are officers, principals, partners, stockholders, employees,

employers, andlor agents of Viacom or any other entities and individuals who are

responsible in some manner for the occurrences alleged herein. Plaintiff s losses, as herein

alleged, were proximately caused by Defendants.

JURISDICTIO

AND VENIIE

This Court has jurisdiction over this action because each Defendant,

including Does

time period relevant to the causes of action stated herein; is, or at all relevant times was,

through 20, has been doing business in the State of California within the
a

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resident of the State of Californa; andlor purposefully directed tortious activities towards

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California residents.

8.

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Venue in this Court is proper pursuant to California Code of Civii Procedure

$$ 395 et seq. because each Defendant, including Does 1 through 20, has resided in andlor

t4 had its principai place of doing business in the County of Los Angeles within the time
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period relevant to the causes of action stated herein and a substantial part of the events

t6 giving rise to the claims for relief occurred in Los Angeles County.
F'ACTUAL ALLEGATIONS

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9.

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Bellator is a limited liability company engaged in the business of mixed

I9 martial arts promotion.

10.

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Bellator was founded in September 2008 by Bellator Chairman and Chief

2l Executive Officer ("CEO") Bjorn

11.

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23

12.

as

capital into Beilator

as

In December 2010, Viacom, through its subsidiary MTV Networks,

purchased a f,ifty (50) percent interest in Bellator.

13.

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In March 2009, Plaintiff invested US $1,000,000

one of its founding shareholders.

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25

Rebney.

In December 201 1, Viacom or its subsidiary purchased a controlling interest

in Bellator. After additional purchases in January 2013, April 2014, and June 2014,

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3155128.6

COMPLAINT

Viacom amassed a controlling interest equaling or exceeding ninety-seven (97) percent of

Bellator.

14.

Bellator has four (4) members. Plaintiffls current ownership interest in

Beliator is approximately one (1) percent. Viacom's current ownership interest in Bellator

is ninety-seven (97) percent. The remainder of the ownership interests in Bellator are held

by two other members.

15.

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8

At all relevant times alleged herein, Viacom has controlled Bellator by

owning a majority and controlling interest in Bellator.

16.

The parties have managed their affairs at all relevant times pursuant to the

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Third Amended and Restated Operating Agreement dated February 1,2011 and amended

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as of August 16, 2011, December 22,2011, and December

I0,2012 (as amended, the

l2 "Operating Agreement").

n.

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Since Viacom became the controlling member of Bellator, it has acted in a

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manner contrary to the Operating Agreement by causing Bellator to breach provisions

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the Operating Agreement to Viacom's benefit and at the expense of the remaining

of

l6 members.

18.

T7

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Section 7.2(c) of the Operating Agreement provides that certain periodic

reports, including unaudited balance sheets, unaudited income statements, cash flow

I9 statements, and changes in the Members' equity must

be provided to the Members on a

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monthly, quarterly, and year-end basis. Prior to May 2015, the Members had not been

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provided with a report in a year, with a fifteen-month gap in statements before that.

19.

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In May 2015, in response to Piaintiff s demands, Viacom hastily provided

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f,rnanciai statements that only highlight Viacom's failure to pursue all profits Bellator

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would be entitled to if Viacom had been acting in Bellator's interests rather than its own.

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Viacom's failure to provide financials at regular intervals has made it

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impossible for Plaintiff to track Bellator's performance and the flow of monies in and out

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of the company, and the most recent report does not provide complete redress for the

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3 155 128.6

COMPLAINT

damages Plaintiff has suffered as a result of Viacom's deliberate attempts to conceal

Bellator's financial status from minority members.

2I.

Viacom's attempts to mislead minority members such

as

Plaintiff extend far

beyond failure to provide regular hnancial updates. On information and belief, Viacom

actively instructed members of management not to provide any information concerning the

operation of Bellator to minority members in blatant violation of Viacom's f,rduciary duties

as controlling member and the clear and express provisions of the Operating Agreement

and applicable law.

22.

Viacom has further caused damage to Bellator and Plaintiff by causing its

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subsidiary, New Remote, to repeatedly breach its license agreement ("License

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Agreement") with Bellator or by otherwise diverting revenues due to Bellator from the

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License Agreement. Section 13(b) of the License Agreement, which concerns "In-Show

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Sponsorship Integration", provides that Bellator shall be owed

fifty (50)

percent of "Net

t4 Sponsorship Revenue" received from advertisements that integrate multle methods of

l5 promotion, such as televised commercial break advertisements combined with in-show

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logo placement on cage mats.

23.

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Countless advertisers across multiple advertiser categories have sponsored

Bellator events through in-show sponsorship integration including logos and

t9 advertisements on Bellator's cage mats, through televised commercial spots on events and
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through mlmerous additional in-show sponsorship integration elements. Advertising

2t sponsorship revenues for these in-show sponsorship integrations run tens to hundreds of
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millions of dollars. Using its wide range of business interests, Viacom is able to divert

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income to its affiliated companies while purposefully obscuring the terms of these

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advertising contracts. By doing so, Viacom can retain all revenues within its empire whiie

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depriving Bellator and its minority members of the significant revenue that is diverted to

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its other business interests.

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3 l 55 128.6

4
COMPLAINT

24.

Over the past several years, none of this substantial revenue has been paid to

Beilator. Receipt of this revenue would have made Bellator profitable, eliminated the need

for further investment capital, and avoided dilution of Plaintiff

25.

In response to Plaintiff

s interest

in Bellator.

letter dated April .1,2015, Viacom conceded that

Bellator was owed three years 'worth of revenue from the License Agreement which had

not been paid, and informed Plaintiff that an adjustment of $500,000 would be reflected in

Bellator's next quarterly financial statements. As Viacom had not provided timely

financials to Plaintiff or otherwise explained how this unilateral allocation occurred, it was

and remainS impossible to determine how much revenue is being diverted by Viacom to its

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other business interests.

26.

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Furthermore, Viacom's offer of $500,000 to be allocated to Bellator for three

t2 years' worth of In-Show Sponsorship Integration revenue is a transparent attempt to

l3 further mislead and placate Plaintiff in order to divert attention from the true sum owed to
t4 Bellator under the License Agreement. Although Plaintiff cannot provide
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an accurate

calculation of the sums owed to Bellator due to Viacom's intentional, fraudulent, and self-

r6 serving attempts to prevent minority members from having access to accurate and timely

t7 financial information, especialiy concerning integrated advertising revenue, Plaintiff

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estimates that the actual sum owed would be in the tens of millions to over a hundred

t9 million dollars.

27.

20

Viacom's attempts to put its own and its subsidiaries' interests over the

2t interests of Bellator and Bellator's minority members do not end with the diversion of In22

Show Sponsorship Integration revenue due under the License Agteement. In recent years,

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Viacom has directed its subsidiary, Spike TV, to substantially reduce the number of events

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produced by Bellator under the Spike

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diminished Beliator's revenues and harmed the interests of minority members such

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Plaintiff

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as

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- Bellator licensing deal, which has substantially

Viacom has responded to complaints by minority members and previous

members of management concerning Viacom's self-dealing and refusal to act in Bellator's

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I28.6

COMPLAINT

best interests by terminating the previous management team and acting to suppress all

dissenting and critical minority opinions

29.

Through its position of power as majority member of Bellator and as the

owner of many other business interests that benefit from deals with Bellator, Viacom

continues to harm minority members by placing them in the untenable position of being

ignorant of the true financial situation of Bellator and unable to act in Bellator's interests

30.

Viacom has consistently acted in its own self interest to the detriment of

Bellator and its minority members, and, as a result, Plaintiff has Iost complete trust in

Viacom

as the

majority owner of Bellator.

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F'IRST CAUSE OF ACTTON

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(Breach of Contract)

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1.

Plaintiff incorporates by reference the allegations set forth in paragraphs

l3 through 30, above.

32.

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Plaintiff has performed all covenants, conditions, and promises required of it

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to be performed under the Operating Agreement and Amendments thereto and/or was

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excused from performing such obligations.

33.

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18

At various times continuing to the present, Viacom has breached the

Operating Agreement and Amendments thereto through the actions and omissions alleged

t9 above.

34.

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As a direct and proximate result of Viacom's breach of the Operating

2t Agreement and Amendments

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proven al1'rial.

SECOND CA

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E OF'ACTION

(Breach of Fiduciary DutY)

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5.

Plaintiff incorporates by reference the allegations set forth in paragraphs 1

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through 30, above.

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36.

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thereto, Plaintiff has been damaged in an amount to be

Viacom is and was at all relevant times the majority and controlling member

of Bellator.
3155128.6

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COMPLAINT

.
38.

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Plaintiff is and was at all relevant times a minority member of Bellator.

As controlling member, Viacom owed and continues to owe Plaintiff

fiduciary duties of care, good faith, loyalty and fidelity regarding all matters related to

Bellator's business and financial affairs andlor related to Plaintiffls investment and interest

in Bellator.

39.

Viacom further owed a fiduciary duty to Plaintiff to use Viacom's ability to

control Bellator in a fair, just and equitable manner, and not to use Viacom's power

controlling member in

40.

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detrimental to Plaintiff.

Viacom breached its fiduciary duties to Plaintiff through the actions and

omissions alleged above.

41.

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a manner

as

As a direct and proximate result of Viacom's breach of fiduciary duties and

obligations, Plaintiff has been damaged in an amount to be proven af trial.

42.

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The wrongful acts of Viacom, as herein alleged, were done with malice, and

t4 with the intent to defraud and oppress Plaintiff, and maximize its personal gain, thereby
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entitling Plaintiff to punitive damages, according to proof.

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THIRD CAUSE OF ACTION

(Breach of the Covenant of Good Faith and Fair Dealing)

43.

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Plaintiff incorporates by reference the allegations set forth in paragraphs

r9 through 30, above.

44.

20

Viacom at allrelevant times had a duty to Plaintiff,

as a member of Bellator,

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and as a party to the Operating Agreement and Amendments thereto, to act fairly and in

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good faith pursuant to its status as a member, and in carrying out its responsibilities under

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the Operating Agreement and Amendments thereto. Implicit in Viacom's obligations was

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the duty to act fairly and in good faith toward Plaintiff, and an obligation on the part

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Viacom thatitwould do nothing to injure, frustrate or interfere with the right of Plaintiff to

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receive the benefits of the Operating Agreement and Amendments thereto.

45.

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Viacom breached the implied covenant of good faith and fair dealing by

unfairly 'dealing with Plaintiff and by acting in bad faith toward Plaintiff
3 l 55 128.6

of

1
COMPLAINT

as alleged above.

46.

As a direct result of the breaches of the implied covenant of good faith and

fair dealing, as alleged herein, Plaintiff has suffered damages in an amount to be proven

trial.

FOURTH CAUSE OF ACTION

(Unjust Enrichment)
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Plaintiff incorporates by reference the allegations set forth in paragraphs

through 30, above.

48.

Through its wrongful acts and conduct described above, Defendant has

profited at the expense and exclusion of Plaintiff.

49.

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1i

at

As a direct and proximate result of Viacom's wrongful acts and conduct, as

described above, Plaintiff has suffered damages in an amount to be proven attrial.

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FIFTH CAUSE OF ACTION

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(Judicial Dissolution)

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50.

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through 30, above.

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51.

Plaintiff incorporates by reference the allegations set forth in paragraphs 1

Under California law, a limited liability company may be judicially

t7 dissolved pursuant to an action by a member when, among other things:

(a)

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It is not reasonably practicable to carry

on the limited liabilify company

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or corporation's business in conformity with the Articles of Organization and

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Operating Agreement;

(b) Dissolution is reasonably necessary for the protection of the rights or

2t

interests of a member;

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(c) The limited liability company is deadlocked or subject to internal

dissention; andlor

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(d) Those in control of the limited liability company have been guilty of, or

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have knowingly countenanced, persistent and pervasive fraud, mismanagement, or

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abuse of authority.

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3 r 55

128.6

I
COMPLAINT

52. All of these circumstances exist here. Viacom is the majority and controlling

of

member of Bellator and has been acting in its own interest rather than the interests

Bellator, as shown by Viacom's refusal to enforce license agreements entered into with its

own subsidiary, or diversion of the revenues from that agreement, that would return profits

and revenues to Bellator and all members of Bellator such as

deadlocked and subject to internal dissention. Dissolution is reasonably necessary for the

protection of Plaintiff s rights and interests in Bellator. Viacom, as controlling member of

Bellator, has engaged in persistent and pervasive fraud, mismanagement and/or abuse of

authority, andlor has knowingly countenanced such conduct.

53.

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Plaintiff. Members

Plaintiff is therefore entitled to entry of a decree ofjudicial dissolution of

Bellator pursuant to California Corporations Code section I735L

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SIXTH CAUSE OF ACTION

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(Equitable Relief for LLC Member Oppression)

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54.

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through 30, above.

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55.

17

Plaintiff incorporates by reference the allegations set forth in paragraphs 1

Viacom has undertaken a course of oppression and abuse of Plaintiff

minority member of Bellator.

56.

18

Viacom wrongfully diverted revenues that would have been realized by

conduct to its own use and benefit to the exclusion and

injury of Plaintiff.

2t
22

as a

'

l9 Beilator but for Viacom's wrongful

20

are

57

Viacom's conduct substantially defeats the reasonable expectations that were

central to Plaintiff s decision to invest in and acquire an interest in Bellator.

58.

23

Plaintiff has incurred damages as a result of Viacom's oppressive,

24

fraudulent, and self-interested conduct, for which Plaintiff seeks recovery from Viacom,

25

weli

ali equitable relief to which Plaintiff may be entitled.

as

59.

26

Viacom is the only potential buyer of Plaintiff

s interest

in Bellator

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Bellator is a closely-held LLC,and no ready market exists for the sale of Plaintiff

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interest.
31s5128.6

9
COMPLAINT

as
s

as

60.

A judicial order commanding Viacom to purchase Plaintiff s interest in

Bellator is the only practical alternative to dissolution, as other remedies would not suffice

or would be unfair to Plaintiff.

JURY DEMAND

61.

Plaintiff hereby demands a jury trial.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff Koloni Reklam, Sanayi, Ticaret LTDiSTI prays for

judgment in its favor against Defendant Viacom, Inc., and respectfully requests the

following relief:

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An accounting;

c.
d.

An award to Plaintiff of punitive damages in an amount to be proven attrial;

An award to Plaintiff of compensatory damages in an amount to be proven at

trial;

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a.
b.

An order compelling Viacom to purchase Plaintiff

s interest

in Bellator at a

price to be determined, or, in the alternative, an order for dissolution of Bellator;

e.

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An award to Plaintiff of pre-judgment and post-judgment interest in the

t7 maximum amounts provided by law;

f.

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An award to Plaintiff of its costs and expenses incurred in this action,

including reasonable attorneys' fees; and

h.

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Any and all other relief this Court deems just and proper.

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3 I 55 128.6

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COMPLAINT

DATED: July 8, 2015

2
3

Ekwan E. Rhow
Gopi K. Panchapakesan
Patricia H. Jun
Bird, Marella, Boxer, Wolpert, Nessim,
Drooks, Lincenberg & Rhow, P.C.

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By

Ekwan E. Rhow
Attorneys for Plaintiff Koloni Reklam, Sanayi,
Ticaret LTD/STI

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3155128.6

COMPLAINT