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Astro Zombies in Tax Law (with ninja)

March 19, 2012

Today, March 19, 2012, The A.V. Club blog posted a review under the category Films That Time Forgot about the 1968 movie Astro-Zombies. Time may have forgotten this movie but the Federal Courts hadn’t. This movie was the subject of 2005 tax litigation resulting from the sale of MGM pictures.

These consolidated cases stem from transactions that occurred in the wake of the 1996 sale of the legendary motion picture company Metro-Goldwyn-Mayer (MGM) by the French banking giant Credit Lyonnais.

This case involves the Ackerman group acquisition of MGM’s parent company, Santa Monica Holdings Corp. (SMHC) “in a manner that might preserve the tax attributes”. Meanwhile they wanted to use the loses. Here in litigation, the Court must decide about these very large tax loss claims.

Nos. 6163-03, 6164-03

filed – May 11, 2005

astro zombies

The following film titles and development projects were listed in Schedule 1.6(b) of the exchange and contribution agreement as assets of SMHC:

U.S. Video Film Rights

1. Alley Cat
2. Astro Zombies
3. Auditions
4. Avenger
5. Banana Monster
6. Battle of the Last Panzer
7. Battle of the Valiant
8. Beast, The
9. Blood Brothers
10. Blood Castle
11. Cardiac Arrest
12. Carthage in Flames
13. Cold Steel for Tortuga
14. Conqueror and the Empress
15. Crimson
16. Demoniac
17. Duel of Champions
18. Equinox
19. Erotkill
20. Escape from Hell
21. Escape from Venice
22. Fear
23. Fist of Fear, Touch of Death
24. Fraulein Devil
25. Headless Eyes
26. Invincible Gladiators
27. Invisible Dead
28. Jungle Master
29. Oasis of Zombies
30. Return of the Conqueror
31. Return of the Zombies
32. SS Camp 5
33. SS Experimental Love Camp
34. The Sword & The Cross
35. Throne of Vengeance
36. Tiger of the Seven Seas
37. Tormentor
38. White Slave
39. Zombie
40. Mother & Daughter: Loving War
41. Octavia
42. Platypus Cove
43. Summer Camp Nightmare
44. Bombay Talkie
45. Courtesans of Bombay
46. Hullabaloo over Georgia
47. Shakespeare Wallah
48. Nasty Hero
49. To Love Again
50. Sticks and Stones
51. This Time I’ll Make You Rich
52. Danger Zone
53. Hunter’s Blood
54. Sidewinder One
55. Firefight
56. House of Terror
57. Ninja Hunt
58. Ninja Showdown
59. Ninja Squad
60. Outlaw Force
61. Plutonium Baby
62. Terror on Alcatraz
63. The Visitants
64. War Cat
65. White Ghost

The Court mentions that:

Troma was the only distributor of SMHC films. Of the 65 film titles in the EBD film library, Troma ultimately distributed six films: “Astro Zombies”, “Banana Monster”, “Battle of the Last Panzer”, “Escape from Hell”, “Fist of Fear, Touch of Death”, and “Plutonium Baby”.


But goes on to say:

Several of these distributions ran into legal troubles. On March 27, 1998, Epic Productions informed Troy & Gould that SMHC’s rights had expired in “Astro Zombies”, “Banana Monster”, and “Fist of Fear, Touch of Death”.

In footnote:

On Nov. 4, 1998, Troma sent Crown Capital another invoice for $ 103,025 on the release of video and DVD for “Banana Monster”, “Fist of Fear, Touch of Death”, “Astro Zombies”, “Battle of Last Panzer”, and “Escape from Hell”. This invoice requested a $ 50,000 advance payment.

The Court says:

On December 9, 1997, Troy & Gould concluded that there were significant gaps in the chain-of-title documentation for the EBD film titles and rights to some of the film titles had expired or were expiring. Troy & Gould concluded that: “it is not possible to determine what rights have effectively been acquired. It also is unclear who possesses the rights other than domestic video in the various pictures, and who possesses the reversion rights in domestic video.” This point is clearly illustrated when we consider that two of the EBD film titles that Troma attempted to distribute, “Astro Zombies” and “Banana Monster”, were the subject of immediate cease and desist letters. SMHC was also informed that the rights to a third film that Troma attempted to distribute, “Fist of Fear, Touch of Death”, had also expired.

banana monster

The Court also says that

experts agree that older film titles, except perhaps for classics, would be less in demand than recent productions.

The Court’s point is about the questionable value of the claimed tax losses. This is going to be a complicated tax litigation and this somewhat long opinion is just deciding some motions in limine.

This case has the dubious distinction of being the only opinion in the Federal Court record with both “zombie” and “ninja”. And yes, I think I am going to start a NinjaLaw blog.


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