Ex-Maker Studios CEO Danny Zappin Files Suit to Delay Disney Acquisition

/ Apr 10, 2014


Disney agreed to buy Maker Studios for at least $500 million (and as much as $950 million) last month. Upon shareholder approval, it would be the biggest bet on a YouTube business to date — unless ousted Maker Studios CEO Danny Zappin gets his way.

Zappin, one of the founders of Maker Studios, is asking a California district court judge to issue a temporary restraining order to delay the vote on the sale, which is scheduled for Tuesday, April 15.

In his application for a temporary restraining order, in advance of an injunction motion, Zappin’s attorneys essentially make the claim that the shareholder vote should not happen because the defendants — Maker Studios executive chairman Ynon Kreiz, founders Ben Donovan and Lisa Donovan, investors Dana Settle and Mark Suster, among others — did not provide Maker shareholders with accurate and complete information for an informed vote to happen.

Specifically, the application argues that the notice for merger agreement and other documents sent by Maker Studios to its shareholders on March 31 are “defective and misrepresent and omit material facts necessary for Maker’s shareholders to make an informed Merger vote.”

This all stems from a lawsuit filed last June by Zappin, Scott Katz, Derek Jones, and Will Watkins, which accused the Maker board of various breaches of “fiduciary duties” and “embezzlement of corporate assets.”

The central element to this new suit is the previous lawsuit’s argument that the Maker board illegally “issued shares to themselves and diluted the common stock for their own financial gain to the detriment of other Maker shareholders and take control of Makers’ board so that they could ‘rapidly create a ‘liquidity event’’ so that they could sell Maker and obtain significant returns on their investments irrespective of the best interests of Maker and to the detriment of Maker and its shareholders.”

A mouthful, yes. But in short, according to the plaintiffs, the Maker board used shady tactics to oust Zappin as CEO, get more shares for themselves, and chase an acquisition (“the liquidity event”) as fast as possible, regardless of how that affected Maker shareholders.

Maker Studios, for its part, denied the claims of the original lawsuit, which came a month after Zappin relinquished his CEO role to Ynon Kreiz.

The defendants are requesting the court to throw both cases out, claiming that neither have any merits.

And for what its worth, Disney, which we’re sure did its due diligence on the ongoing legal situation with Zappin before deciding to buy Maker, is not named in this new suit.

If the judge agrees with Zappin and the plaintiffs, though, this could get really interesting.

Maker Studios reps did not immediately respond to a request for comment.

Tags: , , , , , , , , ,

  • Shouldn’t the Bliptv guys also have say. .

  • TL

    Why doesn’t he just get his cut of the millions. Then turnaround and make a new company on the same format.


Legendary Digital Reveals Alpha Subscription Service Launch...


Time Inc. Teams with Digital Comedy Producers Jash for Branded Content

Amazon Logo

Amazon Greenlights Three Comedy Pilots as Series


How the Cartoon Network Combined the Best of VOD and Linear TV...

Industry Tickets Selling Fast!
Click above to lock in your registration for VidCon 2015!

Jukin Media Goes Viral for Brands with Ethos Division Launch

Streamy Awards

Streamy Awards Trade In VH1 for YouTube, Again


Matching Ads to Videos Not So Simple, According to Zefr’s...


Plug Pulled on Canadian SVOD Service Shomi


What’s Trending on the Twitter Sale

Machinima Logo

Machinima Teams with SiriusXM for Daily Esports Radio Show


AwesomenessTV, Vice, Complex to Power New HearstLive...


VIDEO: ‘Dirty 30’ Confessions with Stars Hart,...


Facebook Says It’s Sorry It Vastly Overestimated Video...


Pilgrim Media Group CEO Craig Piligian (‘The...


Heroes or Rats?: YouTube Unveils New Program for Creators Who...

Vessel says it's doing well in its first month

Why Verizon is Pursuing Vessel, the...


How Canvs Media is Harvesting Emotional Insights on YouTube,...


Marlon Wayans Getting ‘Naked’ for Netflix with Regina Hall


HuffPost RYOT Launching Virtual Reality Comedy Series and News...


YouTube Launches #voteIRL Campaign Targeting Digital-First Generation


How Top YouTubers (incl. Tyler Oakley & Meghan Rienks)...


Charlie Sheen to Star in Crackle Feature ‘Mad Families’


Gunpowder & Sky Buys Distributor FilmBuff As Vision for...


Toy Freaks Top Viewed YouTube Channel in August According to...


Emmy Wrap-Up 2016: Jeffrey Tambor (‘Transparent’)...


Twitter Scores 2.1 Million Viewers for Thursday Night Footall Kickoff


Vloggers Not Unique Snowflakes: 90 Million Flag YouTube Videos...

Mode Media

‘Billion Dollar Startup’ Mode Media Shuts Down


Who Is Winning The Marketing Revolution And Why?


Netflix Orders ‘She’s Gotta Have It’ Series...


What Is ‘Swedish Dicks’ and Who Is Selling It?


How GMC is Using the AOL Series ‘Seamlessly She’...


Liberty Global to Put Netflix on Set-Top Boxes in 30 Countries


Getting to the Spine of VR’s Monetization Challenges with...


Meredith Hosted Its Own “Front” Stacked with 20 New Series


Verizon and Hearst Move RatedRed.com and Seriously.TV Under...


Twitter Launches Live Streaming Apps for Amazon Fire, Apple TV...

YouTube Community

YouTube Fights Back Against Social Media Rivals with Community Feature

Casual Hulu

Vimeo Opening Television Store with Lionsgate Content, Launching...

A Perfect Day in LA Tastemade Jaunt VR Virtual Reality

From Donuts to Malibu, Tastemade and Jaunt Get Immersive in...